Midtown Division, which is part of Courtyard Enterprises, recently reported a sales margin of 30% and an ROI of 21%.
Required:
A. Briefly define sales margin, capital turnover, and return on investment.
B. Assume that Midtown has residual income of $220,000 and that Courtyard uses an imputed interest rate of 10%. Compute Midtown's capital turnover and invested capital.
C. In answering this question, ignore the assumptions stated in in requirement "B," and your answer. Instead, assume that Midtown's invested capital amounted to $2,500,000. On the basis of this information, calculate income and sales revenue.

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The Answer of Midtown Division, which is part of Courtyard Enterprises, recently reported a sales margin of 30% and an ROI of 21%.
Required:
A. Briefly define sales margin, capital turnover, and return on investment.
B. Assume that Midtown has residual income of $220,000 and that Courtyard uses an imputed interest rate of 10%. Compute Midtown's capital turnover and invested capital.
C. In answering this question, ignore the assumptions stated in in requirement "B," and your answer. Instead, assume that Midtown's invested capital amounted to $2,500,000. On the basis of this information, calculate income and sales revenue.

Midtown Division, Which Is Part of Courtyard Enterprises, Recently Reported