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The following information relates to last year's operations at the Legumes Division of Gervani Corporation: Minimum required rate of return 3 % Return on investment (ROI) 5 % Sales $ 730,000 Turnover (on operating assets) 2 times What was the Legume Division's net operating income last year

Respuesta :

Answer:

$18,250

Explanation:

In this question, we are asked to calculate the net operating income for a division of a firm.

We proceed as follows;

Turnover=Sales/Average operating assets

Average operating assets=(730,000/2)=$365000

Return on investment=net operating income/Average operating assets

Hence Average operating assets=($365000*5%)

which is equal to

=$18250.

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