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777dan777 [17]
3 years ago
5

A firm has net working capital of $440, net fixed assets of $2,186, sales of $5,500, and current liabilities of $750. How many d

ollars worth of sales are generated from every $1 in total assets?
a. $1.70
b. $2.52
c. $1.63
d. $1.87
e. $2.09
Business
1 answer:
Goryan [66]3 years ago
4 0

Answer:

c. $1.63

Explanation:

We have to calculate the asset turnover which is shown below:

Total asset turnover = (Sales revenue ÷ Total assets)

where,

Sales revenue = $5,500

The net working capital = Current assets - current liabilities

$440 = Current asset - $750

So, the current asset = $750 + $440

                                   = $1,190

And, the total asset equal to

= Fixed asset + current asset

= $2,186 + $1,190

= $3,376

Now the total asset turnover equal to

= $5,500 ÷ $3,376

= 1.63

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