The Pasta Division of Whole Grain Corporation Had Sales of $7,000,000

Multiple Choice

The Pasta Division of Whole Grain Corporation had sales of $7,000,000 and operating income of $1,190,000 last year. The total assets of the Pasta Division were $2,000,000, while current liabilities were $300,000. Whole Grain Corporation's target rate of return is 13%, while its weighted average cost of capital is 8%. The effective tax rate for the company is 40%. What is the Pasta Division's capital turnover?

A) 5) 9
B) 6) 7
C) 23.3
D) 3) 5