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25) To evaluate the indicators that measure financial performance of an investment center, a business needs key performance A) manufacturing efficiency and product defect rate
25) To evaluate the indicators that measure financial performance of an investment center, a business needs key performance A) manufacturing efficiency and product defect rate B) operating income and the use of the center's assets C) customer satisfaction and market share D) generation of sales revenues and control of operating expenses 26) Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year. Agriculture Division Industrial Division $1,250,000 $230,000 $5,540,000 Net sales Operating income $140 $17,60 $330,000 Calculate the profit margin for the Industrial Division of the company. (Round your answer to two decimal places.) A) 4.15% B) 5.33% C) 18.40% D) 12.57% 27) Lakefront Equipment Company has several divisions that are investment centers. Data for the Boat Division and the Trailer Division are shown here: Boat Division Trailer Division Operating income $85,000 $670,000 $800,000 Total assets at Jan. 1 Total assets at Dec .31 $215,00 $220 Which of the following statements would be the most meaningful interpretation of this data? A) The Boat Division's performance is better than that of the Trailer Division because it has higher assets B) The Boat Division uses its assets less efficiently than the Trailer Division does because it has a lower return on investment. C) The Boat Division shows a more efficient use of assets than the Trailer Division because it has a higher operating income. D) The Boat Division is financially more successful than the Trailer Division because it shows an increase in assets. 28) Which of the following is an expanded form of calculating return on investment? A) Profit margin ratio x Asset turnover ratio B) Net profit ratio Inventory tumover ratio C) Gross profit ratio x EVA D) Asset turnover ratio x Inventory turnover ratio
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