The following information relates to last year's operations at the Paper Division of Germane Corporation: What was the Paper Division's net operating income last year?
A)$24, 300
B)$29, 160
C)$145, 800
D)$162, 000

Question

The following information relates to last year's operations at the Paper Division of Germane Corporation:  What was the Paper Division's net operating income last year?
A)$24, 300 
B)$29, 160 
C)$145, 800 
D)$162, 000

Quizplus · Accepted Answer

ROI = Margin × Turnover
18% = Margin × 5
Margin = 18% ÷ 5 = 3.6%
Margin = Net operating income ÷ Sales
3.6% = Net operating income ÷ $810, 000
Net operating income = 3.6% × $810, 000 = $29, 160

The Following Information Relates to Last Year's Operations at the Paper