Eber
Wares is a division of a major corporation. The following data are for the
latest year of operations:
2 (TCO D) Eber Wares is a division of a major corporation. The following data are for the latest year of operations:
Sales …..$30,000,000
Net operating income……$ 1,170,000
Average operating assets ….$ 8,000,000
The company’s minimum required rate of return ….18%
Required:
i. What is the division's margin?
ii. What is the division's turnover?
iii. What is the division's return on investment (ROI)?
iv. What is the division's residual income?
TUTORIAL PREVIEW
i) Division’s Margin = Net operating income / Sales
= $1,170,000 / $30,000,000 = 3.9%
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