Question

The Portland Division's operating data for the past two years is as follows: Year 1 Year 2 Return on investment 12 % 24 % Net operating income ? $ 288,000 Turnover ? 2 Margin ? ? Sales $ 1,600,000 ? The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The net operating income for Year 1 was:

Multiple Choice
A. $192,000
B. $128,000
C. $266,667
D. $208,000

Answer 1

To find the net operating income for Year 1 in the Portland Division, we need to determine the margin for Year 1. Given that the margin for Year 2 was 150% of the margin for Year 1, we can solve for the margin of Year 1 and calculate the net operating income.

Step-by-step explanation:

To find the net operating income for Year 1, we need to determine the margin for Year 1.

We know that the margin for Year 2 was 150% of the margin for Year 1. Let's assume the margin for Year 1 is x.

From the given information, we can write the equation: 1.5x = Margin for Year 2.

Next, we can find the margin for Year 2 by multiplying the turnover and margin.

From the given information, we have: 2 * x = Margin for Year 2.

Solving these equations simultaneously, we get x = 1, and the margin for Year 1 is 1.

Therefore, the net operating income for Year 1 is $192,000 (1 * $192,000 = $192,000).

Answer 2

None of the above

$13.333.333,33

Explanation:

Year 1:

Consider the following calculation

Return on Investment = Net Operating Income / Average Operating Assets

0.12 = $1,600,000 / Average Operating Assets

Average Operating Assets = $$13.333.333,3