Radner Industries Is a Division of a Major Corporation

question 131

Essay

Radner Industries is a division of a major corporation. Last year the division had total sales of $23,380,000, net operating income of $2,828,980, and average operating assets of $7,000,000. The company's minimum required rate of return is 12%.
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)?

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Definitions:

Maximize Profits

An objective of firms where they seek to achieve the highest possible financial gain from their operations, often by optimizing production and sales strategies.

Supply Function

A mathematical equation or curve that shows the relationship between the price of a good and the quantity supplied.

Production Function

An economic model that describes the relationship between inputs used in production and the output of those goods or services.

Supply Function

A mathematical model that illustrates the relationship between the supply of a good or service and its price, holding other factors constant.