Hedding Inc

question 27

Essay

Hedding Inc. has two divisions: classic and modern. In the most recent year, the classic division reported sales of $900,000 and an asset turnover of 4.0. The rate of return on average invested assets was 16%.
Required: What was the classic division's margin?

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Definitions:

Reporting Entity

An entity that is required, or chooses, to prepare financial statements.

CEO

Chief Executive Officer, the highest-ranking person in a company or other institution, ultimately responsible for taking managerial decisions.

Share-based Payments

Transactions in which an entity acquires goods or services by offering its own equity instruments or incurring liabilities based on the price of its shares or other equity instruments.

Post-employment Benefits

Benefits, other than termination benefits, that are payable after completion of employment, typically after the employee retires; includes pensions, other retirement benefits, post-employment life insurance, and post-employment medical care.