Suppose the Operating Asset Turnover Ratio Increased by 35% and the Margin

question 1

Multiple Choice

Suppose the operating asset turnover ratio increased by 35% and the margin increased by 25%.What would be the effect on the divisional ROI?

• A)It would increase by 69%.
• B)It would decrease by 60%.
• C)It would increase by 20%.
• D)It would decrease by 50%.

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Definitions:

Mean

To find the average value of a group of numbers, one adds together all the numbers and divides by how many numbers there are.

Skewed

Describes a distribution of data that is asymmetrical, where a tail of the distribution is longer or fatter on one side than on the other.

Overall Average

The mean value calculated from the sum of all elements in a dataset divided by the total number of elements.

Statistics

The practice or science of collecting and analyzing numerical data in large quantities, especially for inferring proportions in a whole from those in a representative sample.