The following information pertains to the three divisions of Marlow Company: $\begin{array}{lrrr}
& \underline{\text { Division} X} & \underline{\text { Division } Y} & \underline{ \text { Division Z }}\
\text { Sales } & ? & ? & 1,250,000 \
\text { Net operating income } & \$ 36,000 & \$ 25,000 & \$ 75,000 \
\text { Average operating assets } & 300,000 & ? & ? \
\text { Return on investment } & ? & 20 \% & 15 \% \
\text { Margin } & 0.10 & 0.05 & ? \
\text { Turnover } & 1.5 & ? & ? \
\text { Target ROI } & 15 \% & 12 \% & 10 \%
\end{array}$ What is the margin for Division Z?
A)1.5%
B)6.0%
C)15.0%
D)100.0%

Question

Quizplus · Accepted Answer

The given information does not include any financial figures such as sales, costs, or profits for each division. Therefore, we cannot directly calculate the margin for Division Z. As such, we cannot choose option A or C.
However, since option D suggests a margin of 100%, it is an invalid option as profit margins can never be 100% or higher. 
Therefore, the best choice is option B (6.0%) as it provides a reasonable estimate of the margin for Division Z.

The Following Information Pertains to the Three Divisions of Marlow