Zync Inc.had $1,150,000 in invested assets, sales of $1,300,000, operating income amounting to $185,000, and a minimum acceptable rate of return of 15% on its invested assets.Zync's profit margin is:
A) 26.0%.
B) 18.8%.
C) 16.5%.
D) 14.2%.

Question

Quizplus · Accepted Answer

The profit margin is calculated as operating income divided by sales. Therefore, the profit margin for Zync Inc. is $185,000 / $1,300,000 = 0.1423, or 14.2%.

Zync IncHad $1,150,000 in Invested Assets, Sales of $1,300,000, Operating Income