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Sales and Average Operating Assets for Company P and Company

question 98

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Sales and average operating assets for Company P and Company Q are given below:
 Sales Average  Operating Assets  Company P $20,000$8,000 Company Q $50,000$10,000\begin{array}{|l|r|r|}\hline & \text { Sales Average } & \text { 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 (Company P and Company Q,respectively) will have to earn in order to generate a return on investment of 20%?

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Definitions:

Distribution

in economics, refers to the way total output, income, or wealth is distributed among individuals or among the factors of production (such as labor, land, and capital).

Production

The process of creating, manufacturing, or producing goods and services, involving labor, raw materials, and tools to fulfill human wants or needs.

Post-industrial Societies

Societies characterized by an economy in which the service sector produces more wealth than the industrial sector, emphasizing information technology and knowledge-based activities.

Knowledge-based Activities

Tasks or occupations that primarily involve the manipulation of information and knowledge, rather than physical labor or manual work.

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