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A company has sales of £ 450,000, Return on capital of 8% and return on assets (capital) is 2.4, what was the operating profi
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Answer #1

Return on aseets = sales / Net assets

given return on assets is 2.4, therefore Net assets = sales / Return on assets

= 450,000 / 2.4 = 187,500

therefore Capital = 187,500

given Return on capital is 8%

Return on capital = Net profit / Capital employed

So, Net profit = Capital employed * Return on capital

= 187,500 * 8%

= 15,000

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