Asked by Ashley Young on Jul 24, 2024
Verified
The following information relates to last year's operations at the Legumes Division of Gervani Corporation: 
What was the Legume Division's net operating income last year?
A) $108,000
B) $135,000
C) $36,000
D) $45,000
Net Operating Income
The profit generated from a company's regular business operations, excluding revenues and expenses from non-operating activities.
- Determine net operating income given a set of operational data.
Verified Answer
LW
Logan WolverineJul 30, 2024
Final Answer :
D
Explanation :
ROI = Margin × Turnover
15% = Margin × 3
Margin = 15% ÷ 3 = 5%
Margin = Net operating income ÷ Sales
5% = Net operating income ÷ $900,000
Net operating income = 5% × $900,000 = $45,000
15% = Margin × 3
Margin = 15% ÷ 3 = 5%
Margin = Net operating income ÷ Sales
5% = Net operating income ÷ $900,000
Net operating income = 5% × $900,000 = $45,000
Learning Objectives
- Determine net operating income given a set of operational data.
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