If the operating asset turnover increased by 50 percent and the margin increased by 50 percent,by how much would the ROI increase?
A)25 percent
B)50 percent
C)100 percent
D)125 percent

Question

Quizplus · Accepted Answer

The ROI (Return on Investment) is calculated as the product of operating asset turnover and margin. If both the operating asset turnover and the margin increase by 50 percent, the new ROI would be 1.5 (operating asset turnover) * 1.5 (margin) = 2.25 times the original ROI, which is a 125 percent increase.

If the Operating Asset Turnover Increased by 50 Percent and the Margin