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30 May, 18:33

Last year a company had sales of $400,000, a turnover of 2.4, and a return on investment of 36%. The company's net operating income for the year was: Multiple Choice $144,000 $120,000 $80,000 $60,000

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  1. 30 May, 18:52
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    The company's net operating income for the year was: $60,000

    Explanation:

    Return on investment (ROI) is calculated by using following formula:

    ROI = Net income/Total investment

    Net Income = ROI x Total investment

    Investment Turnover Ratio = Net Sales / (Stockholders' Equity + Debt)

    or

    Investment Turnover Ratio = Net Sales/Total investment

    Total investment = Net Sales/Investment Turnover Ratio

    The company had sales of $400,000, a turnover of 2.4, and a return on investment of 36%.

    Net Income = ROI x Total investment = ROI x Net Sales/Investment Turnover Ratio = 36% x $400,000/2.4 = $60,000
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Home » Business » Last year a company had sales of $400,000, a turnover of 2.4, and a return on investment of 36%. The company's net operating income for the year was: Multiple Choice $144,000 $120,000 $80,000 $60,000
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