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Gaal Industries is a division of a major corporation. Last year the division had total sales of $26,110,000, net operating income of $1,801,590, and average operating assets of $7,000,000. The company's minimum required rate of return is 18%.
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)?
Residual Value
The projected sum an asset will fetch at the time of sale, once it has surpassed its lifespan.
Straight-Line Method
A method of calculating depreciation or amortization by evenly spreading the cost of an asset over its useful life.
Depreciation Expense
An accounting method to allocate the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.
Residual Value
The estimated value of an asset at the end of its useful life.
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