Timothy Company has invested $2,000,000 in a plant to make vending machines. The target operating income desired from the plant is $300,000 annually. The company plans annual sales of 1,500 vending machines at a selling price of $2,000 each.
Question 1. What is the target rate of return on investment for Timothy Company?
Question 2. What is the markup percentage as a percentage of cost for Timothy Company?