Final answer:
The statement is true; the division's profit margin is indeed 4%, which is calculated by dividing the income by sales and converting it to a percentage.
Step-by-step explanation:
To determine if the statement "A company's division has sales of $4,000,000, income of $160,000, and average assets of $3,200,000; the division's profit margin is 4%" is true or false, we need to calculate the profit margin.
The profit margin is calculated by dividing the net income by sales and then multiplying the result by 100 to get a percentage.
So, the calculation would be ($160,000 / $4,000,000) × 100 = 4%.
In this case, the statement is true, as the division's profit margin is indeed 4%. This aligns with the definition of profit margin as the percentage of sales that has turned into profits.
It is an indicator of the division's profitability.