Gaal Industries is a division of a major corporation, Last year the division had
ID: 2539572 • Letter: G
Question
Gaal Industries is a division of a major corporation, Last year the division had total sales of $24,600,000, net operating income of $5,043,000, and average operating assets of $8,200,000. The company's minimum required rate of return is 12%. Required a. What is the division's margin? (Round your answer to 2 decimal places.) argin b. What is the division's tunover? (Round your answer to 2 decimal places.) unover c. What is the division's return on investment (ROI)? (Round your answer to 2 decimal places.) MacBook AirExplanation / Answer
a. Divison's Margin = Net Operating Income / Total Sales *100
= $ 5,043,000 / $ 24,600,000 *100
= 20.50%
Hence the correct answer is 20.50%
b. Divison's Turnover = Total Sales / Average Operating Assets
= $ 24,600,000 / $ 8,200,000
= 3.00
Hence the correct answer is 3.00
c. Return on Investment = Net Operating Income / Average Operating Assets *100
= 5,043,000/ $ 8,200,000 *100
= 61.50%
Hence the correct answer is 61.50%
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