Question
Megatron Technologies Inc. is a national semi-conductor chip manufacturer and retailer that supplies microchips to various industries such as the automotive industry, the aerospace industry,
Megatron Technologies Inc. is a national semi-conductor chip manufacturer and retailer that supplies microchips to various industries such as the automotive industry, the aerospace industry, and the computing industry. Presented below is information pertaining to two of its largest divisions, Automotive and Aerospace (in thousands of dollars): Sales Operating Income Total Assets Automotive $4,380,000 $713,000 $1,690,000 Aerospace $1,000,000 $151,000 $1,480,000 Megatron has a specified target rate of return of 20%. Requirements (round all calculations to four decimal places): 1. Calculate each divisions ROI. 3 marks 2. Calculate each divisions profit margin. Interpret your results. 4 marks 3. Calculate each divisions asset turnover. Interpret yours results. 4 marks 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results. 4 marks 5. Calculate each division's RI. Interpret your results and offer recommendations for any division with negative RI. 5 marks EN
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