Big Sky Industries is a division of a major corporation. The following data are for the latest year of operations:
$$\begin{array} { l r }
\text { Sales } & \$ 24,900,000 \
\text { Net operating income } & \$ 1,319,700 \
\text { Average operating assets } & \$ 6,000,000\
\text { The company's minimum required rate of return }&12\%
\end{array}$$
Required:
a. What is the division's margin?
b. What is the division's turnover?
c. What is the division's return on investment (ROI)?
d. What is the division's residual income?

Question

Big Sky Industries is a division of a major corporation. The following data are for the latest year of operations:
 $$\begin{array} { l r } 
\text { Sales } & \$ 24,900,000 \
\text { Net operating income } & \$ 1,319,700 \
\text { Average operating assets } & \$ 6,000,000\
\text { The company's minimum required rate of return }&12\%
\end{array}$$ 
Required:
a. What is the division's margin?
b. What is the division's turnover?
c. What is the division's return on investment (ROI)?
d. What is the division's residual income?

Quizplus · Accepted Answer

The Answer of Big Sky Industries is a division of a major corporation. The following data are for the latest year of operations:
 $$\begin{array} { l r } 
\text { Sales } & \$ 24,900,000 \
\text { Net operating income } & \$ 1,319,700 \
\text { Average operating assets } & \$ 6,000,000\
\text { The company's minimum required rate of return }&12\%
\end{array}$$ 
Required:
a. What is the division's margin?
b. What is the division's turnover?
c. What is the division's return on investment (ROI)?
d. What is the division's residual income?

Big Sky Industries Is a Division of a Major Corporation