QUESTION 4 (15 points)

Midland Division, which is part of Courtyard Enterprises, recently reported a sales margin of 30%, and ROI of 21%. Courtyard uses an imputed interest rate of 10%.

Required:

Briefly define sales margin, capital turnover, and return on investment.

Assume that RI is $ 110,000. Compute Midland's capital turnover and invested capital.

Ignoring your work in requirement "B," assume that invested capital amounted to $2,000,000. On the basis of this information, calculate Midland's income, sales revenue and RI.