Answer the Following Questions Using the Information Below:
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question 89

Multiple Choice

Answer the following questions using the information below:
The top management at Amore Corp, a manufacturer of computer games, is attempting to recover from a flood that destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged:
$\begin{array}{lrrr}&\text { Alpha Division }&\text { Beta Division }&\text { Gamma Division }\\\text { Sales } & \$ 5,500,000 & (\mathrm{a}) & \$ 2,500,000 \\\text { Net operating income } & \$ 3,500,000 & \$ 1,100,000 & \$ 1,200,000 \\\text { Operating assets } & (\mathrm{b}) & (\mathrm{c}) & \$ 1,600,000 \\\text { Return on investment } & 0.25 & 0.15 & \text { (d) } \\\text { Return on sales } & (\mathrm{e}) & 0.10 & 0.5 \\\text { Investment turnover } & (\mathrm{f}) & \text { (g) } & 1.5\end{array}$
-What is the Alpha Division's return on sales (e) ?

• A) 60%
• B) 65%
• C) 63.64%
• D) 53.63%

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Definitions:

Future Value

The amount of money an investment is expected to grow to over a period of time when interest or dividends are reinvested.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Salvage Value

The estimated resale value of an asset at the end of its useful life.