The following results for the current year are for the Grundy Division of Salmon Enterprises:
Average operating assets are £1,400,000. The firm's minimum required rate of return is 8 percent. The weighted average cost of capital is 6 percent. The division's tax rate is 30 percent.
Required:

a.
Calculate profit margin for the division.
b.
Calculate asset turnover for the division.
c.
Calculate return on investment (ROI) for the division.
d.
Calculate economic value added (EVA) for the division.

Question

The following results for the current year are for the Grundy Division of Salmon Enterprises:
Average operating assets are £1,400,000. The firm's minimum required rate of return is 8 percent. The weighted average cost of capital is 6 percent. The division's tax rate is 30 percent.
Required:
  
a.
Calculate profit margin for the division.
b.
Calculate asset turnover for the division.
c.
Calculate return on investment (ROI) for the division.
d.
Calculate economic value added (EVA) for the division.

Quizplus · Accepted Answer

The Answer of The following results for the current year are for the Grundy Division of Salmon Enterprises:
Average operating assets are £1,400,000. The firm's minimum required rate of return is 8 percent. The weighted average cost of capital is 6 percent. The division's tax rate is 30 percent.
Required:
  
a.
Calculate profit margin for the division.
b.
Calculate asset turnover for the division.
c.
Calculate return on investment (ROI) for the division.
d.
Calculate economic value added (EVA) for the division.

The Following Results for the Current Year Are for the Grundy