Midland Division, Which Is Part of Courtyard Enterprises, Recently Reported

question 77

Essay

Midland Division, which is part of Courtyard Enterprises, recently reported a sales margin of 30%, ROI of 21%, and residual income of $220,000. Courtyard uses an imputed interest rate of 10%.
Required:
A. Briefly define sales margin, capital turnover, and return on investment.
B. Compute Midland's capital turnover and invested capital.
C. Ignoring your work in requirement "B," assume that invested capital amounted to $2,500,000. On the basis of this information, calculate income and sales revenue.

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