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The Bedding Division of Homestore Corporation had sales of $5,500,000 and operating income of $1,375,000 last year. The total assets of the Bedding Division were
The Bedding Division of Homestore Corporation had sales of $5,500,000 and operating income of $1,375,000 last year. The total assets of the Bedding Division were $2,750,000, while current liabilities were $290,000. Homestore Corporation's target rate of return is 18%, while its weighted average cost of capital is 12%. The effective tax rate for the company is 45%. What is the Bedding Division's sales margin? A. 50% B. 30% C. 25% D. 5.27%
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