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 average operating assets for Year 2 were:
A) $1,000,000
B) $1,080,000
C) $1,200,000
D) $1,388,889

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 average operating assets for Year 2 were:
A) $1,000,000 
B) $1,080,000 
C) $1,200,000 
D) $1,388,889

Quizplus · Accepted Answer

Year 2 ROI = Year 2 Net operating income ÷ Year 2 Average operating assets
36% = $360,000 ÷ Year 2 Average operating assets
Year 2 Average operating assets = $360,000 ÷ 36% = $1,000,000

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