If the profit margin for a division is 8% and the investment turnover is 1.20,the rate of return on investment is 6.7%.

Name: If the profit margin for a division is 8% and the investment turnover is 1.20,the rate of return on investment is 6.7%.
Brand: Quizplus
Rating: 4.9 (33 reviews)

Question

Quizplus · Accepted Answer

The formula for calculating rate of return on investment is profit margin x investment turnover. Using the given values, we get:

0.08 x 1.20 = 0.096 or 9.6%

Therefore, the statement is false as the rate of return on investment is 9.6% and not 6.7%.

If the Profit Margin for a Division Is 8% and the Investment