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Sandra Clothing Company has invested $51,000,000 in its business. The target rate of return for the...

Sandra Clothing Company has invested $51,000,000 in its business. The target rate of return for the company is 20%. It has long-term assets of $25,000,000. Cost of debt for the company is 16%. It expects to sell 15,000 units in the upcoming year. What will be the target operating income per unit for Sandra Clothing Company?

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--Target Operating income = $51000000 invested asset x 20% target return = $ 10,200,000

--Target Operating income per unit
= $ 10,200,000 / 15000 units
= $ 680 Answer

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