The Reed Division reports the following operating data for the past two years: The return on investment at Reed was exactly the same in Year 1 and Year 2.
-Average operating assets in Year 1 were:
A)$160,000
B)$150,000
C)$125,000
D)$100,000

Question

The Reed Division reports the following operating data for the past two years: The return on investment at Reed was exactly the same in Year 1 and Year 2.
-Average operating assets in Year 1 were:
A)$160,000 
B)$150,000 
C)$125,000 
D)$100,000

Quizplus · Accepted Answer

Margin = Net operating income F1F1F1S1F1F1F10 Sales
Sales = Net operating income F1F1F1S1F1F1F10 Margin
= $40,000 F1F1F1S1F1F1F10 16% = $250,000
Turnover = Sales F1F1F1S1F1F1F10 Average operating assets
Average operating assets = Sales F1F1F1S1F1F1F10 Turnover
= $250,000 F1F1F1S1F1F1F10 2.5 = $100,000

The Reed Division Reports the Following Operating Data for the Past