Zylex Corporation has multiple factories across the United States. The upper management at Zylex evaluates each factory

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Zylex Corporation has multiple factories across the United States. The upper management at Zylex evaluates each factory based on the capital turnover ratio from the DuPont system. The following is information for the factory in Pennsylvania for the past year.
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,600,000
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,000
Total assets (prior to subtracting accumulated depreciation) . . . . . . . . . . . . . . . . . . . 8,000,000
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000
Compute the capital turnover ratio using
(1) Total assets and
(2) Assets net of depreciation. Which investment base will the Pennsylvania factory manager prefer and why?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Financial and Managerial Accounting the basis for business decisions

ISBN: 978-1259692406

18th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

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