The printing division at a small factory is in need of a new printer and is currently comparing their choices. They have narrowed it down to two options: Which machine will have the higher investment turnover based on the information provided? (Do not round intermediate calculations.)
A) Machine 1's investment turnover is higher than Machine 2's by 4.43%.
B) Machine 1's investment turnover is higher than Machine 2's by 5.18%.
C) Machine 2's investment turnover is higher than Machine 1's by 4.43%.
D) Machine 2's investment turnover is higher than Machine 1's by 5.18%.

Question

The printing division at a small factory is in need of a new printer and is currently comparing their choices. They have narrowed it down to two options:  Which machine will have the higher investment turnover based on the information provided? (Do not round intermediate calculations.)
A) Machine 1's investment turnover is higher than Machine 2's by 4.43%. 
B) Machine 1's investment turnover is higher than Machine 2's by 5.18%. 
C) Machine 2's investment turnover is higher than Machine 1's by 4.43%. 
D) Machine 2's investment turnover is higher than Machine 1's by 5.18%.

Quizplus · Accepted Answer

This question requires familiarity with the formula for Investment Turnover: Sales/Investment. Machine 1: $3,400/$12,000 = 0.2833, and Machine 2: $2,200/$9,500 = 0.2316. Now, calculate the difference in investment turnover by subtracting the value for Machine 2 from the value from Machine 1 = 0.2833 - 0.2316 = 0.0518. Machine 1 has a higher Investment turnover by 0.0518 or 5.18% when compared to Machine 2 (Choice B).

The Printing Division at a Small Factory Is in Need