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Question(s) / Instruction(s):

The Central Division of American, Inc., has operating income of $19,200 on sales revenue of $160,000. Divisional operating assets are $100,000, and management of American has determined that a minimum return of 16% should be expected from all investments.

 

Required:

(a)

Using the DuPont model, calculate The Central Division’s margin, turnover, and ROI. (Round your intermediate calculations and final answers to 1 decimal place. Omit the "%" sign in your response.)

 

 

Central Division

 

Margin

%

Turnover

turns

ROI

%


 

(b)

Calculate The Central Division’s residual income. (Omit the "$" sign in your response.)

 

Residual Income

$

 

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