Far sight is a division of a major corporation. the following data are for the latest year of operations:
sales $14,720,000
net operating income $1,000,960
average operating assets $4,000,000
the company's minimum required rate of return 14%
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?

A)  Division's margin = 1.000.960/14.720.000 = 7%

B) Division's turnover = 14.720.000/4.000.000= 3,68

C) ROI = 3,68 * 0,07 = 25%

D) 14%*$4.000.000 = $560.000 --> $1.000.960-$560.000=$440.960

Explanation:

To calculate the Division's margin you have to divide the Net Operating Income by Sales.

To calculate the Division's turnover you have to divide the Sales by Average operating assets.

To calculate the ROI you have to Multiply Division's margin by Division's turnover.

And finally the division's residual Income is calculated multiplying the required rate of return by  the Average operating assets and the results are compared with the Net operating income.

answer; ///i believe the correct answer is (350); (c) is your answer

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