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"Columbia Corp.'s required ROI is 10%. Its East Division has operating assets of $7,500,000, profit margin of 15%, and asset turnover of 0.80. Calculate the East Division's operating income."

Respuesta :

Tundexi

Answer:

East Division operating income = $900,000

Explanation:

Profit margin = Net operating income/Sales    

Asset turnover = sales/average operating assets  

0.80= x/7,500,000    

x = 7500000*0.80    

= 6000000      

Thus, sales = 6,000,000    

Profit margin = net operating income/Sales    

15% = x /6,000,000    

x= 6,000,000*15%    

=900,000

Net operating income = 900,000

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