Assume that Division X has generated sales revenue of $3,025,000 and achieved income from operations of $242,000 using $1,800,000 of invested assets.If management desires a minimum rate of return of 12%,the profit margin would be:
A)59.5%.
B)13.4%.
C)12%.
D)8%.

Question

Quizplus · Accepted Answer

The profit margin is calculated by dividing the income from operations by the sales revenue. Here, $242,000 / $3,025,000 = 0.08 or 8%.

Assume That Division X Has Generated Sales Revenue of $3,025,000