Last year a company had sales of $370,000, a turnover of 2.1, and a return on investment of 56.7%. The company's net operating income for the year was:
A) $109,890
B) $176,190
C) $99,900
D) $209,790

Question

Quizplus · Accepted Answer

The net operating income can be calculated using the return on investment (ROI) formula: ROI = Net Operating Income / Investment. Given the ROI is 56.7% and the turnover is 2.1, we first find the investment using the formula: Turnover = Sales / Investment. So, Investment = Sales / Turnover = $370,000 / 2.1 ≈ $176,190. Then, Net Operating Income = ROI * Investment = 56.7% * $176,190 ≈ $99,900.

Last Year a Company Had Sales of $370,000, a Turnover