Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Question

Edition 9ISBN: 0073527068

Edition 9ISBN: 0073527068

Exercise 38

Step-by-step solution

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Step 1 of 2

Step 2 of 2

Answer 1

a. 15% ROI = (Margin * 2.0 Turnover)

Margin required as a manufacturer =7.5%

2.0 Turnover = (Sales / $6,000,000 Average total assets)

Sales required as a manufacturer = $12,000,000

7.5% Margin = (Net Income / $12,000,000 Sales)

Net Income required as a manufacturer = $900,000(or $0.9 million)