Reference: 12-06
the Baily Division Recorded Operating Data as Follows

question 27

Multiple Choice

Reference: 12-06
The Baily Division recorded operating data as follows for the past two years: $$\begin{array} { | l | l | l | } \hline & \text { Year 1 } & \text { Year 2 } \\\hline \text { Sales } & ? & \$ 1,200,000 \\\hline \text { Stockholders' equity } & \$ 540,000 & 720,000 \\\hline \text { Average operating assets } & \$ 600,000 & ? \\\hline \text { Margin } & 15 \% & ? \\\hline \text { Return on investment } & 22.5 \% & 18 \% \\\hline\end{array}$$ Baily Division's turnover was exactly the same in both Year 1 and Year 2.
-Sales and average operating assets for Company P and Company Q are given below: $$\begin{array} { | l | l | l | } \hline & \text { Sales } & \text { Average Operating Assets } \\\hline \text { Company P } & \$ 20,000 & \$ 8,000 \\\hline \text { Company Q } & \$ 50,000 & \$ 10,000 \\\hline\end{array}$$ What is the margin that each company will have to earn in order to generate a return on investment of 20%?

• A)12% and 16%.
• B)8% and 4%.
• C)2.5% and 5%.
• D)50% and 100%.

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Definitions:

Numeric Ages

Ages or dates assigned to geological events or rock formations expressed in years, often determined through radiometric dating.

Magnetic Reversals

Occurrences where the Earth's magnetic field switches direction, swapping the magnetic north and south poles.

Numeric Ages

Refers to the actual number of years that have passed since a particular geological event or the formation of a rock.

Landslide

The sudden and rapid movement of a large amount of earth material, such as rock and soil, downslope due to gravity.