The Dry Wall Division Reports the Following Operating Data for the Past

question 6

Multiple Choice

The Dry Wall Division reports the following operating data for the past two years:
$$\begin{array} { | l | r | r | } \hline \text { Margin } & \text { Year 1 } & \text { Year 2 } \\\hline \text { Turnourer } & 16 \% & ? \\\hline \text { Average operating assets } & 2.5 & 2 \\\hline \text { Net operating income } & \$ 40,000 & ? \\\hline \text { Stockholders' equity } & \$ 80,000 & \$ 125,000 \\\hline \text { Sales } & ? & ? \\\hline\end{array}$$ The return on investment at the Dry Wall Division was exactly the same in Year 1 and Year 2.Average operating assets in Year 1 were:

• A) $160,000.
• B) $150,000.
• C) $125,000.
• D) $100,000.

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Definitions:

Core Business

The primary area of a company's operation or the main source of its profitability, representing its fundamental mission or the key focus of its commercial activity.

Noncore Business

Parts of a company's operations that are not essential to its main line of business or primary revenue source.

Accounting

The practice of recording, classifying, and summarizing financial transactions to provide useful financial information for decision-making.

Production

The process of creating goods and services using labor, machinery, and resources to meet consumer demand.