Cleopatra Corporation's Lingerie division has a segment margin of $729,000 and net sales revenue of $5,400,000 for the current reporting period.Average total assets for the period were $3,375,000.The division manager is considering implementing a new inventory system which would reduce the average total assets by $675,000.Assuming no change in sales or segment margin,the projected ROI with the reduction in inventory would be
A) 13.5%.
B) 20%.
C) 21.6%.
D) 24%.

Question

Cleopatra Corporation's Lingerie division has a segment margin of $729,000 and net sales revenue of $5,400,000 for the current reporting period.Average total assets for the period were $3,375,000.The division manager is considering implementing a new inventory system which would reduce the average total assets by $675,000.Assuming no change in sales or segment margin,the projected ROI with  the reduction in inventory would be
A) 13.5%.
B) 20%.
C) 21.6%.
D) 24%.

Quizplus · Accepted Answer

The Answer of Cleopatra Corporation's Lingerie division has a segment margin of $729,000 and net sales revenue of $5,400,000 for the current reporting period.Average total assets for the period were $3,375,000.The division manager is considering implementing a new inventory system which would reduce the average total assets by $675,000.Assuming no change in sales or segment margin,the projected ROI with  the reduction in inventory would be
A) 13.5%.
B) 20%.
C) 21.6%.
D) 24%.

Cleopatra Corporation's Lingerie Division Has a Segment Margin of $729,000