Engels, Inc. has the following data available for two of its divisions for last year:
The imputed interest for Marx Inc. is 24%. The tax rate for Marx Inc. is 18%. Required:
(1) Compute the following for each division
(a) Sales margin
(b) Capital turnover
(c) ROI
(d) Residual income
(e) EVA, (Assume there are no current liabilities)
(2) Briefly discuss which division appears most successful and why?
Correct Answer:
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(a) Asian Sales margin = $92,000/$46...
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