A division of a firm has a net profit of $640 000 before imputed interest and a residual income of $240 000. If a rate of 10 per cent is used to compute imputed interest, calculate the division's return on investment (rounded to a whole number) .

A) 4%
B) 10%
C) 16%
D) 35%

Imputed Interest

The interest rate that is considered or assumed in the calculation of the cost of a decision, not explicitly paid.

Residual Income

The amount of income that an individual has after all personal debts and expenses have been paid from his or her earnings.

Return On Investment

A financial metric used to evaluate the efficiency of an investment, calculated as net profit divided by the initial cost of investment.