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Vance Increquires All of Its Divisions to Maintain a Return on on Investment

Question 111

Essay

Vance Inc.requires all of its divisions to maintain a return on investment (ROI)of at least 45 per cent.The manager of one of the divisions expects the division's net operating income to be $400 000 and its sales to be $2 000 000.
Required:
Calculate the division's required average operating assets in order to achieve the minimum ROI.

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