Question

Assume Intel Corporation (INTC) and Texas Instruments (TXN) report the following information. Intel Corp Texas Instruments ($ millions) Sales PPE, net Sales PPE, net 2015 $34,209 $15,768 $12,580 $3,918 2016 38,826 17,111 13,392 3,899 Compute the 2016 PPE turnover for both companies. a. INTC: 2.27 TXN: 3.44 b. INTC: 2.17 TXN: 3.21 c. INTC: 2.50 TXN: 3.50 d. INTC: 2.36 TXN: 3.43

Answer 1

Answer:

d. INTC: 2.36 TXN: 3.43

Explanation:

The property , plant equipment turnover is the ratio of sales divided by the amount of PPE as shown below:

PPE turnover=sales/(beginning PPE+ending PPE)/2

Intel Corporation (INTC):

PPE turnover=$38,826/($15,768+$17,111)/2

PPE turnover=$38,826/$16,439.50  

PPE turnover=2.36 times

Texas Instruments (TXN):

PPE turnover=$13,392/( $3,918+$3,899)/2

PPE turnover=$13,392/$3,908.50

PPE turnover=3.43 times

The correct option is D