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Assume the Hiking Shoes division of the All About Shoes Corporation had the following results last year (in thousands). Management's target rate of return is 5% and the weighted average cost of capital is 25%. Its effective tax rate is 30%. $13,000,000 1,300,000 1,500,000 Sales Operating income Total assets Current liabilities 810,000 What is the division's sales margin? O A. 10.00% O B. 54.00% O C. 866.67% O D. 86.67%

Assume the Hiking Shoes division of the All About Shoes Corporation had the following results last year (in thousands). Management's target rate of return is 5% and the weighted average cost of capital is 25%. Its effective tax rate is 30%. $13,000,000 1,300,000 1,500,000 Sales Operating income Total assets Current liabilities 810,000 What is the division's sales margin? O A. 10.00% O B. 54.00% O C. 866.67% O D. 86.67%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume the Hiking Shoes division of the All About Shoes Corporation had the following results last year (in thousands). Management's target rate of return is 5% and the weighted average cost of capital is 25%. Its effective tax rate is 30%. $13,000,000 1,300,000 1,500,000 Sales Operating income Total assets Current liabilities 810,000 What is the division's sales margin? O A. 10.00% O B. 54.00% O C. 866.67% O D. 86.67%
Transcribed Image Text:Assume the Hiking Shoes division of the All About Shoes Corporation had the following results last year (in thousands). Management's target rate of return is 5% and the weighted average cost of capital is 25%. Its effective tax rate is 30%. $13,000,000 1,300,000 1,500,000 Sales Operating income Total assets Current liabilities 810,000 What is the division's sales margin? O A. 10.00% O B. 54.00% O C. 866.67% O D. 86.67%
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