Marigold Pharmaceuticals is evaluating its Vioxx division, an investment centre. The division has a $44800 controllable...
Marigold Pharmaceuticals is evaluating its Vioxx division, an investment centre. The division has a $44800 controllable margin and $298000 of sales. How much will Marigold’s average operating assets be when its return on investment is 8%?
$560000
$604800
$298000
$253200
Homework Answers
| We Know, | |||||
| Return on Investment = Net Income / Average Operating assets | |||||
| Here, Controllable Margin is nothing but Net Income | |||||
| Controllable Margin | 44800 | ||||
| Therefore, Average Operating assets = Controllable Margin / ROI | |||||
| 44800/8% | |||||
| $ 5,60,000 | |||||
| Option (A) is correct | |||||
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