Big Sky Industries Is a Division of a Major Corporation

question 96

Essay

Big Sky Industries is a division of a major corporation.The following data are for the latest year of operations: $$\begin{array} { | l | r | } \hline \text { Sales } & \$ 24,900,000 \\\hline \text { Net operating income } & \$ 1,319,700 \\\hline \text { Average operating assets } & \$ 6,000,000 \\\hline \begin{array} { l } \text { The company's minimum required rate of } \\\text { return }\end{array} & 12 \% \\\hline\end{array}$$
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?

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Definitions:

Product Name

The title given to a merchandise or service to distinguish it from other offerings.

Trademark

A distinguishable symbol, pattern, or phrase that differentiates the goods or services of a specific origin from those of other sources.

Oligopolists

Firms or individuals that dominate a particular market, leading to a market structure known as oligopoly, where a few entities control the majority of market share.

Undistributed Profits

Profits earned by a company that are not paid out as dividends to shareholders but are retained within the company for reinvestment.