The document contains multiple examples of calculating financial metrics such as return on investment, return on sales, and investment turnover ratio for various divisions of different companies based on information about revenues, operating costs, assets, and net operating income. Return on investment is calculated by taking the net operating income and dividing it by the total operating assets. Return on sales is calculated by taking the net operating income and dividing it by total revenues. Investment turnover ratio is calculated by taking total revenues and dividing by total operating assets. The document tests the reader's ability to calculate these metrics from financial data and choose the correct answer.
The document contains multiple examples of calculating financial metrics such as return on investment, return on sales, and investment turnover ratio for various divisions of different companies based on information about revenues, operating costs, assets, and net operating income. Return on investment is calculated by taking the net operating income and dividing it by the total operating assets. Return on sales is calculated by taking the net operating income and dividing it by total revenues. Investment turnover ratio is calculated by taking total revenues and dividing by total operating assets. The document tests the reader's ability to calculate these metrics from financial data and choose the correct answer.
The document contains multiple examples of calculating financial metrics such as return on investment, return on sales, and investment turnover ratio for various divisions of different companies based on information about revenues, operating costs, assets, and net operating income. Return on investment is calculated by taking the net operating income and dividing it by the total operating assets. Return on sales is calculated by taking the net operating income and dividing it by total revenues. Investment turnover ratio is calculated by taking total revenues and dividing by total operating assets. The document tests the reader's ability to calculate these metrics from financial data and choose the correct answer.
The document contains multiple examples of calculating financial metrics such as return on investment, return on sales, and investment turnover ratio for various divisions of different companies based on information about revenues, operating costs, assets, and net operating income. Return on investment is calculated by taking the net operating income and dividing it by the total operating assets. Return on sales is calculated by taking the net operating income and dividing it by total revenues. Investment turnover ratio is calculated by taking total revenues and dividing by total operating assets. The document tests the reader's ability to calculate these metrics from financial data and choose the correct answer.
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During the past twelve months, the Suzy Corporation had a net income of $50,000.
What is the amount of the investment if the return on investment is 20%? a.$100,000 b.$200,000 c.$250,000 d.$500,000
Answer: c 0.20 = $50,000/x; x = $250,000
During the past twelve months, the Zen Corporation had a net income of $39,200. What is the return on investment if the amount of the investment is $280,000? a.10% b.12% c.14% d.16%
Answer: c $39,200/$280,000 = 14%
The Gamma Corporation had the following information for 20x3:
Revenue $ 900,000 Operating expenses 670,000 Total assets 1,150,000
What is the return on investment?
a.10% b.20% c.25% d.78.2%
Answer: b $230,000/$1,150,000 = 20%
Smile Company has two regional offices. The data for each is as follows: Maryland New York Revenues $ 580,000 $ 596,000 Operating assets 4,800,000 9,000,000 Net operating income 2,016,000 2,400,000
What is the Maryland Division's return on investment?
a.0.42 b.0.54. c.0.96. d.4.12. Answer: a $2,016/$4,800 = 0.42% Smile Company has two regional offices. The data for each is as follows: Maryland New York Revenues $ 580,000 $ 596,000 Operating assets 4,800,000 9,000,000 Net operating income 2,016,000 4,860,000
What is the return on investment for the New York Division?
a.0.42. b.0.54 c.0.96 d.4.12
Answer: b $4,860/$9,0000= 54%
THE FOLLOWING INFORMATION APPLIES TO next 3 QUESTIONS
The Primera Corporation reported the following information for its Cyclotron Division:
What is the Cyclotron Division's investment turnover ratio?
a.2.00 b.3.33 c.2.50 d.0.80
Answer: a $1,000,000/$500,000 = 2
What is the Cyclotron Division's return on sales?
a.0.2 b.0.4 c.0.5 d.0.6
Answer: b $1,000,000 - $600,000 = $400,000; $400,000/$1,000,000 = 0.40
What is the Cyclotron Division's return on investment?
a.0.2 b. 0.4 c. 0.5 d. 0.8
Answer: d $400,000 / $500,000 = 0.8 THE FOLLOWING INFORMATION APPLIES TO next 4 QUESTIONS . The top management at Techno Company, a manufacturer of computer games, is attempting to recover from a flood that destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged:
Alpha Division Beta Division Gamma Division
Sales $2,500,000 (a) $1,150,000 Net operating income $1,500,000 $650,000 $ 575,000 Operating assets (b) (c) $ 766,667 Return on investment 0.25 0.15 (d) Return on sales (e) 0.10 0.5 Investment turnover (f) (g) 1.5
