Division B's profit margin is 16%, and the investment turnover is 1.80.What is Division B's rate of return on investment?
A) 15.7%
B) 28.8%
C) 17.0%
D) 10.6%

Question

Quizplus · Accepted Answer

The formula for rate of return on investment is profit margin multiplied by investment turnover. Thus, for Division B, the rate of return on investment is:

16% x 1.80 = 28.8%

Therefore, the answer is B, with a rate of return on investment of 28.8%.

Division B's Profit Margin Is 16%, and the Investment Turnover