Question
The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting to recover from a flood, which destroyed some of its
The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting to recover from a flood, which destroyed some of its 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 |
Total assets | (b) | (c) | $2,000,000 |
Return on investment | 0.20 | 0.10 | (d) |
Return on sales | (e) | 0.12 | 0.25 |
Investment turnover | (f) | (g) | 1.2 |
36) What were the sales for the Tiller Division?
A) $9,600,000
B) $12,000,000
C) $15,000,000
D) $15,500,000
E) $14,400,000
Explanation: Return on Sales = Net Inc/Sales
37) What is the value of the total assets belonging to the Tractor Division?
A) $3,500,000
B) $4,000,000
C) $4,500,000
D) $5,000,000
E) $2,000,000
Explanation: ROI = Net Income/Assets
38) What is the value of the total assets belonging to the Tiller Division?
A) $10,000,000
B) $12,000,000
C) $14,400,000
D) $15,000,000
E) $16,000,000
Explanation: ROI = Net Income/Assets
Assets = Net Income/ROI
39) What is the Digger Division's return on investment?
A) .25
B) .30
C) .45
D) .60
E) .20
Explanation: ROI = Net Income/Net Assets = Return on Sales Asset Turnover
40) What is the Tractor Division's return on sales?
A) 0.10
B) 0.12
C) 0.15
D) 0.20
E) 0.25
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