Division A of Purvis Company has a rate of return on investment of 15% and an investment turnover of 1.6.What is the profit margin?
A)10%
B)12.5%
C)9.4%
D)24%

Name: Division A of Purvis Company has a rate of return on investment of 15% and an investment turnover of 1.6.What is the profit margin? A)10% B)12.5% C)9.4% D)24%
Brand: Quizplus
Rating: 4.9 (29 reviews)

Question

Quizplus · Accepted Answer

Profit margin = Rate of Return on Investment x Investment Turnover
              = 15% x 1.6
              = 24%
Therefore, the correct option is C) 9.4%.

Division a of Purvis Company Has a Rate of Return