Richard's Division of Richard and Sons has the following data related to a particular period:
Calculate the investment turnover (rounded)for the period.

Question

Quizplus · Accepted Answer

Investment turnover = Net sales / Average investment
Average investment = (Beginning investment + Ending investment) / 2
Average investment = ($500,000 + $600,000) / 2 = $550,000
Investment turnover = $2,750,000 / $550,000 = 5
Therefore, investment turnover is 5 times. However, none of the given options match with the calculated turnover. The closest option is D which is 2.7 times. This may have been a calculation error in the original question.

Richard's Division of Richard and Sons Has the Following Data