Pacific Division for Bean Company has a rate of return on investment of 28% and an investment turnover of 1.4. What is the profit margin?
A) 28%
B) 20%
C) 14%
D) 39.2%

Question

Quizplus · Accepted Answer

We can use the formula: Return on Investment (ROI) = Profit Margin x Investment Turnover
Given, ROI = 28% and Investment Turnover = 1.4
Substituting the values in the formula, we get:
28% = Profit Margin x 1.4
Profit Margin = 20% (Option B)

Pacific Division for Bean Company Has a Rate of Return