Two Divisions of Oregano Company (Divisions TX and OY) Have

question 42

Multiple Choice

Two divisions of Oregano Company (Divisions TX and OY) have the same profit margins. Division TX's investment turnover is larger than that of Division OY
(1) 2 to 1.0) . Income from operations for Division TX is $55,000, and income from operations for Division OY is $43,000. Division TX has a higher return on investment than Division OY by

• A) using income from operations as a performance measure
• B) comparing the profit margins
• C) applying a negotiated price measure
• D) using its assets more efficiently in generating sales

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