If the operating asset turnover increased by 50 percent and the margin increased by 50 percent,the ROI would increase by
A)50%.
B)25%.
C)100%.
D)125%.

Name: If the operating asset turnover increased by 50 percent and the margin increased by 50 percent,the ROI would increase by A)50%. B)25%. C)100%. D)125%.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

ROI = operating asset turnover * margin. If both the operating asset turnover and the margin increases by 50%, then:
New ROI = (1.5*1.5) * ROI = 2.25 * ROI

Therefore, the ROI would increase by 125%.

If the Operating Asset Turnover Increased by 50 Percent and the Margin