16) What is the Gamma Division's return on investment? A) 0.25 B) 0.42 C) 0.60 D) 0.75 17) What is the Alpha Division's return on sales? A) 0.25 B) 0.42 C) 0.60 D) 0.75 Answer: C Explanation: 0) $3,000,000/$5,000,000 = 0.60 The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting to recover from a fire that destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged: Tractor Division Tiller Division Digger Division Sales $10,000,000 (a) $2,400,000 Net operating income $1,000,000 $1,440,000 $ 600,000 Operating assets (b) $ 2,000,000 Return on investment 0.20 0.10 (d) Return on sales (e) 0.12 0.25 Investment turnover (1) (g) 1.2 18) What were the sales for the Tiller Division? A) 89,600,000 B) S12,000,000 C) $15,000,000 D) S15,500,000 20) What is the value of the operating assets belonging to the Tiller Division? A) S10,000,000 B) S 12,000,000 C) S 14,400,000 D) S 15,000,000 21) What is the Digger Division's return on investment? A).25 B).30 C).45 D).60 22) What is the Tractor Division's return on sales? A) 0.10 B) 0.12 C) 0.15 D) 0.20 23) What is the Tractor Division's investment turnover? A).50 B) 1.0 C) 2.0 D) 2.5 Answer: C Explanation: C) Investment Turnover = Sales / Assets step 1 is to calculate the Assets ROI = Net Income / Assets Assets = net Income / ROI Assets = $1,000,000/0.20 = $5,000,000 Then Investment Turnover $10,000,000 / $5,000,000 = 2.0 24) What is the Tiller Division's investment turnover? A).50 B).833 C) 1.2 D) 1.5 Answer the following questions using the information below: The top management at Munchie 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 $5,000,000 $2,300,000 Net operating income $3,000,000 $1.300,000 $ 1,150,000 Operating assets (b) (c) $1,533,333 Return on investment 0.25 0.15 (d) Return on sales (e) 0.10 0.5 Investment turnover (1) 1.5