For 2005, Aberdeen's return on sales was 10% and its investment turnover was 2.0. Return on investment for 2005 was:
A)5%
B)10%
C)12%
D)20%

Question

Quizplus · Accepted Answer

Return on investment can be calculated by multiplying return on sales (ROS) and investment turnover (ITO).
Return on investment (ROI) = ROS x ITO
= 10% x 2.0
= 20%
Therefore, the correct answer is C)12%, which is the closest option to the calculated ROI of 20%.

For 2005, Aberdeen's Return on Sales Was 10% and Its