The Portland Division's operating data for the past two years is as follows: The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The average operating assets for Year 2 were:
A)$750,000
B)$400,000
C)$1,200,000
D)$800,000

Question

The Portland Division's operating data for the past two years is as follows:  The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The average operating assets for Year 2 were:
A)$750,000 
B)$400,000 
C)$1,200,000 
D)$800,000

Quizplus · Accepted Answer

Year 2 ROI = Year 2 Net operating income ÷ Year 2 Average operating assets
24% = $288,000 ÷ Year 2 Average operating assets
Year 2 Average operating assets = $288,000 ÷ 24% = $1,200,000

The Portland Division's Operating Data for the Past Two Years