Beta Division had the following information:
$$\begin{array} { l r }
\text { Asset base in Beta Division } & \$ 400,000 \
\text { Net income in Beta Division } & \$ 50,000 \
\text { Weighted average cost of capital } & 12 \% \
\text { Target ROI } & 15 \% \
\text { Margin for Beta Division } & 20 \%
\end{array}$$
-Refer to the figure.What is the turnover ratio for Beta Division?
A)0.125
B)0.200
C)0.625
D)8.000

Question

Beta Division had the following information:
$$\begin{array} { l r } 
\text { Asset base in Beta Division } & \$ 400,000 \
\text { Net income in Beta Division } & \$ 50,000 \
\text { Weighted average cost of capital } & 12 \% \
\text { Target ROI } & 15 \% \
\text { Margin for Beta Division } & 20 \%
\end{array}$$
-Refer to the figure.What is the turnover ratio for Beta Division?
A)0.125
B)0.200
C)0.625
D)8.000

Quizplus · Accepted Answer

The turnover ratio is calculated by dividing sales by the asset base. Given the net income ($50,000) and the margin (20%), we can calculate sales as $50,000 / 0.20 = $250,000. Therefore, the turnover ratio is $250,000 / $400,000 = 0.625.

Beta Division Had the Following Information -Refer to the Figure