Stan's Balloon Rides had net sales of \( \$ 280,611 \) and the cost of goods sold were \( \$ 110,900 \). Operating expenses were \( \$ 45,315 \) and owner's equity is \( \$ 423,600 \). Calculate the return on investment. (Round to the nearest tenth) Select one: a. \( 29.4 \% \) b. \( 18.8 \% \) c. \( 24.1 \% \) d. \( 28.6 \% \)

To calculate the return on investment (ROI), we first need to determine the net income. Net income is calculated by subtracting the cost of goods sold (COGS) and operating expenses from net sales. Net Sales = \( \$ 280,611 \) Cost of Goods Sold = \( \$ 110,900 \) Operating Expenses = \( \$ 45,315 \) Net Income = Net Sales - COGS - Operating Expenses Net Income = \( 280,611 - 110,900 - 45,315 = 124,396 \) Now, we can calculate ROI using the formula: ROI = \( \frac{Net Income}{Owner's Equity} \times 100 \) Plugging in the values: ROI = \( \frac{124,396}{423,600} \times 100 \approx 29.4\% \) So, the correct answer is **a. 29.4%**. Stan's Balloon Rides is likely to attract adventure seekers, and analyzing its ROI can provide insights into how effectively it utilizes owner's equity to generate profit. A high ROI like 29.4% indicates a strong performance in relation to the investment. One big takeaway is the importance of keeping operating expenses in check; any unnecessary costs can eat into that beautiful profit margin! Always track those expenses carefully; they can fly away quickly just like hot air balloons.