Asked by Riley Runnells on May 28, 2024
Verified
Youns Inc.reported the following results from last year's operations: 
The company's average operating assets were $5,000,000. At the beginning of this year, the company has a $1,400,000 investment opportunity that involves sales of $2,800,000, fixed expenses of $616,000, and a contribution margin ratio of 30% of sales.
If the company pursues the investment opportunity and otherwise performs the same as last year, the combined turnover for the entire company will be closest to:
A) 9.50
B) 1.64
C) 2.66
D) 2.08
Turnover
This is a measure of how quickly inventory is sold or how often employees are replaced within a business.
Investment Opportunity
A potential financial venture, project, or asset that could generate a return on investment.
- Examine the repercussions of investment strategies on a business's fiscal performance metrics.
Verified Answer
CP
Chandon PorterJun 02, 2024
Final Answer :
D
Explanation :
Sales = $10,500,000 + $2,800,000 = $13,300,000
Average operating assets = $5,000,000 + $1,400,000 = $6,400,000
Turnover = Sales ÷ Average operating assets = $13,300,000 ÷ $6,400,000 = 2.08
Average operating assets = $5,000,000 + $1,400,000 = $6,400,000
Turnover = Sales ÷ Average operating assets = $13,300,000 ÷ $6,400,000 = 2.08
Learning Objectives
- Examine the repercussions of investment strategies on a business's fiscal performance metrics.