United Machining's margin was 2% and turnover was 3.0 on sales of $60 million for the year.On the basis on this information:
A)net income for the year was $3,600,000, average assets were $20 million, and ROI was 2%.
B)net income for the year was $1,200,000, average assets were $10 million, and ROI was 2%.
C)net income for the year was $1,200,000, average assets were $20 million, and ROI was 6%.
D)net income for the year was $3,600,000, average assets were $10 million, and ROI was 6%.

Question

Quizplus · Accepted Answer

Net income is 2% of $60 million, which is $1,200,000. Turnover is 3.0, so average assets are $20 million ($60 million / 3.0). ROI is margin (2%) multiplied by turnover (3.0), which is 6%.

United Machining's Margin Was 2% and Turnover Was 3