Use the information below to answer the following question(s).
The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting to recover from a flood, which destroyed some of its accounting records. The main computer system was also severely damaged. The following information was salvaged:

-What is the Tractor Division's investment turnover?
A) .50
B) 1.0
C) 2.0
D) 2.5
E) 3.0

Question

Use the information below to answer the following question(s).
The top management at Groundsource Company, a manufacturer of lawn and garden equipment, is attempting to recover from a flood, which destroyed some of its accounting records. The main computer system was also severely damaged. The following information was salvaged:
 
-What is the Tractor Division's investment turnover?
A) .50 
B) 1.0 
C) 2.0 
D) 2.5 
E) 3.0

Quizplus · Accepted Answer

Investment Turnover = Sales/Assets
step 1 is to calculate the Assets
ROI = Net Income/Assets
Assets = net Income/ROI
Assets = $1,000,000/0.20 = $5,000,000
Then Investment Turnover = $10,000,000/$5,000,000 = 2.0

Use the Information Below to Answer the Following Question(s)