Suppose the operating asset turnover increased by 75% and the margin increased by 50%. What would be the percentage increase in the ROI?
A) 25.0%
B) 75.0%
C) 100.0%
D) 162.5%

Question

Quizplus · Accepted Answer

The ROI is calculated as the product of the operating asset turnover and the margin. If the operating asset turnover increases by 75%, it becomes 1.75 times its original value. If the margin increases by 50%, it becomes 1.5 times its original value. The new ROI is 1.75 * 1.5 = 2.625 times the original ROI, which is a 162.5% increase.

Suppose the Operating Asset Turnover Increased by 75% and the Margin