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22 August, 15:23

Griffin corp. is evaluating its piquette division, an investment center. the division has a $60,000 controllable margin and $400,000 of sales. how much will griffin's average operating assets be when its return on investment is 10%?

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  1. 22 August, 16:43
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    Given:

    Controllable margin = 60,000

    sales = 400,000

    return on investments = 10%

    Return on investments = net profit / average operating assets

    10% = 60,000 / ave. operating assets.

    Average operating assets = 60,000 / 10%

    Average operating assets = 600,000

    Griffin's average operating assets will be 600,000 when its return on investment is 10%.
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