= 4270,000 6. Data for the East division are as follows: Sales: $1.020,000 Incom

Question

= 4270,000 6. Data for the East division are as follows: Sales: $1.020,000 Income from Operations (a) 102,000 Invested Assets $680,000 Rate of Return on Investment 15.0% Profit Margin (b) 10 Investment turnover (c) ing items, identifying each by the letters (a) through (c). Round percents and investment turnover to one decimal place. 3 points each letter a) I cont from opr hons b) Proft Margin-Trcona from opors Sales X 100 Sals/Invesed ASseb 15.oyo _a_ x ongooo 10% Tnvesthant Sales mover 6 80,000

Explanation / Answer

a Income from operations = Invested assets*ROI = 680000*15% = 102000 b Profit margin = Income from operations/Sales = 102000/1020000 = 10% c Investment turnover = Sales/Invested assets = 1020000/680000 = 1.5

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