The Millard Division's operating data for the past two years are provided below: Millard Division's margin in Year 2 was 150% of the margin in Year 1.
The turnover for Year 1 was:
A) 1.2
B) 1.5
C) 3.0
D) 4.0

Question

The Millard Division's operating data for the past two years are provided below:  Millard Division's margin in Year 2 was 150% of the margin in Year 1.
The turnover for Year 1 was:
A) 1.2 
B) 1.5 
C) 3.0 
D) 4.0

Quizplus · Accepted Answer

Year 2 ROI = Year 2 Margin × Year 2 Turnover
36% = Year 2 Margin × 3
Year 2 Margin = 36% ÷ 3 = 12%
Year 2 Margin = 150% × Year 1 Margin
12% = 150% × Year 1 Margin
Year 1 Margin = 12% ÷ 150% = 8%
Year 1 ROI = Year 1 Margin × Year 1 Turnover
12% = 8% × Year 1 Turnover
Year 1 Turnover = 12% ÷ 8% = 1.5

The Millard Division's Operating Data for the Past Two Years