Two Divisions of Crowson Company (Divisions X and Y) Have

question 126

Multiple Choice

Two divisions of Crowson Company (Divisions X and Y) have the same profit margins.Division X's investment turnover is larger than that of Division Y (1.2 to 1.0) .Which of the following statements is true?

• A) Division Y will have a higher return on investment as it is using its assets more efficiently in generating sales.
• B) Division X will have a higher return on investment as it is generating more operating income.
• C) Division X will have a higher return on investment as it is using its assets more efficiently in generating sales.
• D) Division Y will have a higher return on investment as it is generating more operating income.

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Definitions:

Inherited

Received or passed down by inheritance, referring to assets, traditions, genetic traits, or conditions transferred from one generation to the next.

Monthly

Occurring or done once every month.

Prize

A reward given for a specific achievement or win in a competition.

Earn

To receive payment in return for work or services provided, or to gain money or profit through investment or business activities.