Asked by Shaylie Pickrell on Jul 09, 2024
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Cabell Products is a division of a major corporation. Last year the division had total sales of $26,320,000, net operating income of $2,424,320, and average operating assets of $7,000,000. The company's minimum required rate of return is 12%.The division's turnover is closest to:
A) 10.86
B) 3.76
C) 0.35
D) 2.89
Average Operating Assets
An average value of the assets used in the regular operations of a business over a specific period.
Net Operating Income
A measure of a company's profitability, calculated as the difference between its total revenue and operating expenses, excluding taxes and interest.
Return On Investment
A financial ratio used to calculate the profitability of an investment, comparing the gain from an investment relative to its cost.
- Evaluate the turnover ratio and understand its role in the context of Return on Investment.
- Evaluate the business segment's performance via financial metrics involving net operating income, sales results, and average operating assets.
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Learning Objectives
- Evaluate the turnover ratio and understand its role in the context of Return on Investment.
- Evaluate the business segment's performance via financial metrics involving net operating income, sales results, and average operating assets.
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