# Solving for unknowns

J

Income: $280,000

Revenue: $_______

Invested capital: $______

Return on sales: 7%

Capital turnover: 4

Rate on return on invested capital: _____%

Cost of capital: 16%

Economic profit: $_____

K

Income: $_____

Revenue: $_______

Invested capital: $3,000,000

Return on sales: 4%

Capital turnover: _____

Rate on return on invested capital: 20%

Cost of capital: 12%

Economic profit: $_____

L

Income: $_____

Revenue: $_______

Invested capital: $16,000,000

Return on sales: ____%

Capital turnover: 3

Rate on return on invested capital: 15%

Cost of capital: ____%

Economic profit: $320,000

1. Fill in all blanks.

2. Which division is the best performer? Explain.

https://brainmass.com/business/accounting/solving-unknowns-financial-accounting-345966

#### Solution Preview

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J

Income: $280,000

Revenue: $_______

Return on Sales = Net Income/Revenue

Revenue = 280,000/7% = 4,000,000

Invested capital: $______

Capital turnover = Revenue/Invested capital

Invested capital = 4,000,000/4 = 1,000,000

Return on sales: 7%

Capital turnover: 4

Rate on return on invested capital: _____%

Rate of return on invested capital = Net Income/Invested capital = 280,000/1,000,000 = 28%

Cost of capital: 16%

Economic profit: $_____

Economic ...

#### Solution Summary

The solution explains how to solve for various financial accounting variables, including revenue, invested capital, return on sales, capital turnover.