for calculation 26. Youns Ine. reported the following results from last years op

Question

for calculation 26. Youns Ine. reported the following results from last years operations Sales Variable expenses Contribution margin Fixed expenses Net operating income S 10,500,000 6,610,000 3,890,000 3,260,000 630,000 The company's average operating assets were $5,000,000. At the beginning of this year, the company has a $1,400,000 investment opportunity that invol of $2,800,000, fixed expenses of $616,000, and a contribution margin ratio of 30% of sales. ves sales If the company pursues the investment opportunity and otherwise performs the same as last year, combined turnover for the entire company will be closest to: a. 9.50 b. 1.64 c. 2.66 d. 2.08 the

Explanation / Answer

Turnover = Sales / Average Operating Assets

= ($ 10,500,000 + $ 2,800,000) / ($ 5,000,000 + $ 1,400,000)

= 2.08

The combined turnover for the entire company will be closest to : d. 2.08

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