Year 1 Year 2 Margin 16% ? Turnover 2.0 3.0 Average operating assets ? $191,000

Question

Year 1 Year 2   Margin 16%       ?       Turnover 2.0        3.0       Average operating assets ?        $191,000       Net operating income $47,200       ?       Stockholders equity $80,000       $125,000       Sales ?       ?    
The return on investment at Reed was exactly the same in Year 1 and Year 2. Sales in Year 2 amounted to Year 1 Year 2   Margin 16%       ?       Turnover 2.0        3.0       Average operating assets ?        $191,000       Net operating income $47,200       ?       Stockholders equity $80,000       $125,000       Sales ?       ?    

Explanation / Answer

Sales in Year 2 =Average operating assets*turnover=$191,000*3.00=$573,000.

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