Question

The Portland Division's operating data for the past two years is as follows: Year 1 Year 2 Return on investment 12 % 24 % Net operating income ? $ 288,000 Turnover ? 2 Margin ? ? Sales $ 1,600,000 ? The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The net operating income for Year 1 was:

Multiple Choice
A. $192,000
B. $128,000
C. $266,667
D. $208,000

Answer 1

Answer:

None of the above

$13.333.333,33

Explanation:

Year 1:

Consider the following calculation

Return on Investment = Net Operating Income / Average Operating Assets

0.12 = $1,600,000 / Average Operating Assets

Average Operating Assets = $13.333.333,3