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Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below:______.
Sales $ 7,500,000 Net operating income $ 600,000 Average operating assets $ 5,000,000
Required:
1. Compute the margin.
2. Compute the turnover. (Round your answer to 1 decimal place.)
3. Compute the return on investment (ROI). (Do not round intermediate calculations.)

Respuesta :

ayokenny2001

Answer:

See below

Explanation:

1. Compute the margin

Margin = Net operating income / Sales

Margin = $600,000 / $7,500,000

Margin = 0.08 or 8%

2. Compute the turnover

Turnover = Sales / Average operating assets

Turnover = 7,500,000 / 5,000,000

Turnover = 1.5

3. Compute the return on investment

Return on investment = Margin × Turnover

Return on investment = 8% × 1.5

Return on investment = 12%

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