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Krall Company recently had a computer malfunction and lost a portion of its accounting records. The company has reconstructed some of its financial performance measurements including components of the return on investment calculations.
Help Krall rebuild its information database by completing the following table:
Return on Investment Profit Margin Investment Turnover Operation Income Sales Revenue Average Invested Assets
? ? ? $ 70,000 $ 700,000 $1,400,000
? 8% 0.50 100,000 ? 2,500,000
? 12% 1.25 ? 1,400.000 ?
10% ? 2.00 ? 600,000 ?


Sagot :

Answer and Explanation:

The missing amount is as follows:

Return on        Profit     Investment    Operation   Sales           Average

Investment      Margin      Turnover       Income     Revenue   Invested Assets

5%                    10%             0.50             $70,000   $700,000    $1,400,000

(0.50% of 10)  ($70,000       ($700,000 ÷

                        ÷ $700,000)  $1,400,000)

4%                     8%              0.50           $100,000    $1,250,000  $2,500,000

(0.50 of 8%)                                                      (0.50 of $2,500,000)

15%                    12%             1.25           $168,000   $1,400,000    $1,120,000

(1.25 of 12%)                           (12% of $1,400,000) ($1,400,000 ÷ 1.25)

10%                    5%                2           $30,000     $600,000          $300,000

                ($30,000 ÷ $600,000)  (10% of $300,000)   ($600,000 ÷ 2)

     

The formula for investment =

[tex]margin*turnover[/tex]

The formula for profit margin =

[tex]\frac{Operations Income}{SalesMargin}[/tex]

The formula for investment turnover =

[tex]\frac{SalesRevenue}{AverageInvestedAssets}[/tex]

The formula average invested assets =

[tex]\frac{SalesRevenue}{InvestmentTurnover}[/tex]

These formulas are what would be used to fill in the missing values in the excel sheet that I have added as an attachment.

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