Assume the Air Conditioning division of the General Appliance Corporation had the following results last year (in thousands).Management's target rate of return is 15% and the weighted average cost of capital is 10%.Its effective tax rate is 35%.

What is the division's sales margin?
A)80.00%
B)32.80%
C)20.00%
D)400.00%

Question

Assume the Air Conditioning division of the General Appliance Corporation had the following results last year (in thousands) .Management's target rate of return is 15% and the weighted average cost of capital is 10%.Its effective tax rate is 35%.

What is the division's sales margin?

What is the division's sales margin?
A)80.00% 
B)32.80% 
C)20.00% 
D)400.00%

Quizplus · Accepted Answer

C)Operating income $2,000,000/Sales $10,000,000 = 20%

Assume the Air Conditioning Division of the General Appliance Corporation