Rail Star Company reported the following results for 2017: $$\begin{array} { l r }
\text { Sales } & \$ 6,000,000 \
\text { Investment turnover } & 2.4 \
\text { Return on investment } & 10 \%
\end{array}$$ Given this information, how much is the company's invested capital?
A)$2,500,000
B)$1,440,000
C)$600,000
D)-$1,440,000

Question

Rail Star Company reported the following results for 2017: $$\begin{array} { l r } 
\text { Sales } & \$ 6,000,000 \
\text { Investment turnover } & 2.4 \
\text { Return on investment } & 10 \%
\end{array}$$ Given this information, how much is the company's invested capital?
A)$2,500,000
B)$1,440,000
C)$600,000
D)-$1,440,000

Quizplus · Accepted Answer

Invested capital is calculated as Sales divided by Investment Turnover. So, $6,000,000 / 2.4 = $2,500,000.