Carey,Inc.provides the following information: $$\begin{array} { | l | r | }
\hline \text { Profit margin ratio } & 5 \% \
\hline \text { Asset turnover ratio } & 2 \text { times } \
\hline \text { Net sales } & \$ 450,000 \
\hline \text { Target rate of return } & 9 \% \
\hline
\end{array}$$ Calculate the return on investment.
A)10%
B)45%
C)4%
D)14%

Question

Carey,Inc.provides the following information: $$\begin{array} { | l | r | } 
\hline \text { Profit margin ratio } & 5 \% \
\hline \text { Asset turnover ratio } & 2 \text { times } \
\hline \text { Net sales } & \$ 450,000 \
\hline \text { Target rate of return } & 9 \% \
\hline
\end{array}$$ Calculate the return on investment.
A)10%
B)45%
C)4%
D)14%

Quizplus · Accepted Answer

Return on Investment (ROI) is calculated as Profit Margin Ratio multiplied by Asset Turnover Ratio. Here, ROI = 5% * 2 = 10%.

Carey,IncProvides the Following Information Calculate the Return on Investment