P 40,000 P100,000 15% 10% 12%

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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XYZ Company has two divisions, A and B. Information for each division is as follows:
A
Net earnings for division
P 40,000
P 260,000
Asset base for division
P100,000
P1,200,000
Target rate of return
15%
18%
Margin
10%
20%
Weighted average cost of capital
12%
12%
What is the operating asset turnover for A?
1. 0.15
2.0.10
3.4.00
4. 2.50
0 1
O 2
O 3
O 4
Transcribed Image Text:XYZ Company has two divisions, A and B. Information for each division is as follows: A Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the operating asset turnover for A? 1. 0.15 2.0.10 3.4.00 4. 2.50 0 1 O 2 O 3 O 4
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