Margin & Investment Turnover Calculation
Minden Manufacturing Company is evaluating the results of two divisions:
| Eastern | Western | |
| Division | Division | |
| Sales | 40,000,000 | 72,000,000 |
| Operating income | 4,000,000 | 6,480,000 |
| Total Assets | 20,000,000 | 18,000,000 |
Management expects each division to earn a 25% return on assets.
Required:
Calculate profit margin for each division.
Calculate investment turnover for each division.
Calculate Return on Investment using the DuPont Formula.
Calculate residual income for each division.
You must show all your work for credit.