Asked by Timyia Thomas on May 12, 2024
Verified
Tallon Inc.has a $1,200,000 investment opportunity that involves sales of $1,680,000, fixed expenses of $336,000, and a contribution margin ratio of 30% of sales.The turnover for this investment opportunity is closest to:
A) 1.40
B) 0.10
C) 10.00
D) 0.71
Contribution Margin Ratio
The percentage of sales revenue remaining after variable costs are deducted, indicating how much contributes to fixed costs and profit.
Fixed Expenses
Costs that do not change with the level of production or sales over a certain period, such as rent, salaries, and insurance.
Sales
The total amount received from selling goods or services over a given period.
- Understand the concept of turnover in investment opportunities.
Verified Answer
LH
Linda HarrisMay 16, 2024
Final Answer :
A
Explanation :
Turnover = Sales / Investment
Turnover = $1,680,000 / $1,200,000
Turnover = 1.40
Turnover = $1,680,000 / $1,200,000
Turnover = 1.40
Explanation :
Turnover = Sales ÷ Average operating assets = $1,680,000 ÷ $1,200,000 = 1.40
Learning Objectives
- Understand the concept of turnover in investment opportunities.