A division's operating data for the past two years is as follows:
|
Year 1 |
Year 2 |
|
|
Return on investment |
10% |
14% |
|
Net operating income |
? |
$140,000 |
|
Turnover |
? |
2 |
|
Margin |
? |
? |
|
Sales |
$1,000,000 |
? |
In Year 2 the margin was twice as much as the margin in Year 1. How much was the division’s Net Operating Income for Year 1?
Multiple Choice
$100,000
$35,000
$70,000
$140,000
| Year 1 | Year 2 | |
| Return on Investment | 10% | 14% |
| Net Operating Income | $ 35,000 | $ 1,40,000 |
| Turnover(Sales / Invested Assets) | 2.86 | 2 |
| Margin(Net Operating Income / Sales) | 3.50% | 7% |
| Sales | $ 10,00,000 | $ 20,00,000 |
| Invested Assets | $ 3,50,000 | $ 10,00,000 |
| So the answer is Option B | ||
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