Exhibit 11-3
Dillon Company has the following information available for one of its divisions:
$\begin{array}{lr}
\text { Average operating assets } & \$ 4,000,000 \
\text { Sales } & \$ 4,800,000 \
\text { Return on investment (ROI) } & 30 \%
\end{array}$
-Refer to Exhibit 11-3.Dillon requires a minimum return on its investments of 25%.
Based on this information,what is the division's asset turnover (rounded to two decimal places)?
A)2.78
B)0.83
C)4.00
D)1.20
E)None of the answer choices is correct.

Question

Exhibit 11-3
Dillon Company has the following information available for one of its divisions:
 $\begin{array}{lr}
\text { Average operating assets } & \$ 4,000,000 \
\text { Sales } & \$ 4,800,000 \
\text { Return on investment (ROI) } & 30 \%
\end{array}$
-Refer to Exhibit 11-3.Dillon requires a minimum return on its investments of 25%.
Based on this information,what is the division's asset turnover (rounded to two decimal places)?
A)2.78
B)0.83
C)4.00
D)1.20
E)None of the answer choices is correct.

Quizplus · Accepted Answer

The asset turnover is calculated as Sales divided by Average Operating Assets. Thus, $ \frac{\$4,800,000}{\$4,000,000} = 1.20 $.

Exhibit 11-3 Dillon Company Has the Following Information Available for One

Exhibit 11-3
Dillon Company Has the Following Information Available for One