The Central Division of Chemical Company has a return on investment of 22% and an investment turnover of 1.4. What is the profit margin?
A) 20%
B) 15.7%
C) 14%
D) 6.36%

Question

Quizplus · Accepted Answer

Profit margin = Return on Investment * Investment Turnover
Profit margin = 22% * 1.4
Profit margin = 30.8%
Therefore, the closest answer option is B) 15.7% (since it is the only option closest to 30.8%).

The Central Division of Chemical Company Has a Return on Investment