Use the information below to answer the following question(s):
The Beverage Division of Natural Foods Corporation had sales of $4,200,000 and operating income of $840,000 last year. The total assets of the Beverage Division were $1,680,000, while current liabilities were $360,000. Natural Foods Corporation's target rate of return is 9%, while its weighted average cost of capital is 7%. The effective tax rate for the company is 40%.
-What is the Beverage Division's profit margin?
A) 250.00%
B) 50.00%
C) 20.00%
D) 8.57%

Question

Quizplus · Accepted Answer

Profit Margin = Operating Income / Sales
Profit Margin = ($840,000 / $4,200,000) x 100
Profit Margin = 20.00%

Use the Information Below to Answer the Following Question(s)