Mako Division had the following information: $$\begin{array} { l r }
\text { Asset base in Mako Division } & \$ 400,000 \
\text { Net income in Mako Division } & \$ 50,000 \
\text { Weighted average cost of capital } & 12 \% \
\text { Target ROI } & 15 \% \
\text { Margin for Mako Division } & 20 \%
\end{array}$$ What is the turnover ratio for Mako Division?
A)0.200
B)0.625
C)0.125
D)8.000

Question

Mako Division had the following information: $$\begin{array} { l r } 
\text { Asset base in Mako Division } & \$ 400,000 \
\text { Net income in Mako Division } & \$ 50,000 \
\text { Weighted average cost of capital } & 12 \% \
\text { Target ROI } & 15 \% \
\text { Margin for Mako Division } & 20 \%
\end{array}$$ What is the turnover ratio for Mako Division?
A)0.200
B)0.625
C)0.125
D)8.000

Quizplus · Accepted Answer

The turnover ratio is calculated by dividing sales by the asset base. Given the margin (Net Income/Sales) of 20% and net income of $50,000, we can calculate sales as $50,000 / 0.20 = $250,000. Therefore, the turnover ratio is $250,000 / $400,000 = 0.625.

Mako Division Had the Following Information What Is the Turnover Ratio for Mako Division? A)0

Mako Division Had the Following Information What Is the Turnover Ratio for Mako Division?
A)0