A. This answer fails to subtract general and administrative costs in the calculation of income. See the correct answer for a complete explanation.

B. This answer does not include working capital in average total assets. See the correct answer for a complete explanation.

C. ROI is calculated as Net Income divided by Average Total Assets (or Investments). Average assets are equal to the sum of average plant and equipment plus working capital or $2,400,000 ($625,000 + $1,775,000). Net Incomes equals Net Sales minus COGS and G&A expenses or $400,000 ($4,000,000 - $3,525,000 - $75,000). Now we can calculate ROI: $400,000 ÷ $2,400,000 = 16,67%.

D. This answer is incorrect. See the correct answer for a complete explanation.