Figure 5
The following results for the year are for the Candy Division of Art Enterprises:
Average operating assets are £1,200,000. The firm's minimum required rate of return is 5 percent. The tax rate for the firm is 40 percent.
-Refer to Figure 5 above. Asset turnover for the Candy Division is
A) .23
B) .28
C) .30
D) .34

Question

Quizplus · Accepted Answer

Asset turnover is calculated as sales divided by average operating assets. Without the sales figure provided, we cannot directly calculate it. However, if we assume the options are based on a given sales figure, option C (.30) is the most reasonable choice based on typical asset turnover ratios for similar divisions.

Figure 5 The Following Results for the Year Are for the Candy