The following information pertains to the three divisions of Borraw Company:
$\begin{array}{lrr}
& \text { Division A } & \text { Division B } \
\text { Sales } & ? & 1,250,000 \
\text { Net operating income } & \$ 25,000 & \$ 75,000\\text { Average operating assets } & ? & ? \
\text { Return on investment } & 20 \% & 15 \% \
\text { Margin } & 0.05 & ? \
\text { Turnover } & ? & ? \
\text { Target ROI } & 12 \% & 10 \%
\end{array}$
-Refer to the Figure.What are the sales for Division A?
A)$25,000
B)$125,000
C)$208,333
D)$500,000

Question

The following information pertains to the three divisions of Borraw Company:
 $\begin{array}{lrr} 
& \text { Division A } & \text { Division B } \
\text { Sales } & ? & 1,250,000 \
\text { Net operating income } & \$ 25,000 & \$ 75,000\\text { Average operating assets } & ? & ? \
\text { Return on investment } & 20 \% & 15 \% \
\text { Margin } & 0.05 & ? \
\text { Turnover } & ? & ? \
\text { Target ROI } & 12 \% & 10 \%
\end{array}$
-Refer to the Figure.What are the sales for Division A?
A)$25,000
B)$125,000
C)$208,333
D)$500,000

Quizplus · Accepted Answer

The return on investment (ROI) for Division A is 20%, and the net operating income is $25,000. ROI is calculated as (Net Operating Income / Sales). Therefore, Sales = Net Operating Income / ROI = $25,000 / 0.20 = $125,000.

The Following Information Pertains to the Three Divisions of Borraw