Hardin Division of WestCo has sales of $300,000 and NOPAT of $15,000.The company's invested capital is $240,000 and its non-interest-bearing current liabilities are $20,000.What is Hardin Division's profit margin as it relates to investment center performance evaluation?
A)8.0%
B)6.25%
C)5.0%
D)6.8%

Question

Quizplus · Accepted Answer

The profit margin for investment center performance evaluation is calculated as NOPAT divided by sales. In this case, it's $15,000 / $300,000 = 5.0%.

Hardin Division of WestCo Has Sales of $300,000 and NOPAT