Questions: Cabell Products is a division of a major corporation. Last year the division had total sales of 20,070,000, net operating income of 1,063,710, and average operating assets of 4,415,400. The company's minimum required rate of return is 16%. The division's margin is closest to: Multiple Choice 24.1% 22.0% 33.1% 5.3%

Solution Steps

To find the division's margin, we need to calculate the ratio of net operating income to total sales. This will give us the margin as a percentage.

To find the division's margin, we use the formula:

\[ \text{Margin} = \frac{\text{Net Operating Income}}{\text{Total Sales}} \times 100 \]

Substituting the given values:

\[ \text{Margin} = \frac{1,063,710}{20,070,000} \times 100 \]

Calculating the above expression gives:

\[ \text{Margin} = 0.053 \times 100 = 5.3 \]

Final Answer