If Pascal Company's turnover (asset utilization)measure is 2.5 and its margin is 7.5%,its ROI is 18.75%.

Name: If Pascal Company's turnover (asset utilization)measure is 2.5 and its margin is 7.5%,its ROI is 18.75%.
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Question

Quizplus · Accepted Answer

ROI (Return on Investment) can be calculated by multiplying the asset turnover ratio and the profit margin.

ROI = Asset Turnover Ratio x Profit Margin

Given: 
Asset Turnover (Turnover) = 2.5 
Profit Margin = 7.5%

ROI = 2.5 x 0.075 
ROI = 0.1875 or 18.75%

Therefore, the statement is true.

If Pascal Company's Turnover (Asset Utilization)measure Is 2