Cabal Products is a division of a major corporation. Last year the division had total sales of $10,040,000, net operating income of $582,320, and average operating assets of $4,000,000. The company's minimum required rate of return is 14%. The division's margin is closest to:
A)5.8%
B)45.6%
C)14.6%
D)39.8%

Question

Quizplus · Accepted Answer

The margin is calculated as net operating income divided by total sales. So, $582,320 / $10,040,000 = 0.058 or 5.8%.

Cabal Products Is a Division of a Major Corporation