Jasmine Inc. is a small flower shop that is performing some analysis based on their most recent year. They have determined that their profit margin was 0.2876 and investment turnover was 0.2188. They had purchased a new piece of equipment for $3,000. Based upon this information, what was their Return on Investment (ROI)?
A) 0.0629
B) 0.0688
C) 0.5064
D) 0.7608

Question

Quizplus · Accepted Answer

This question requires familiarity with the formula for ROI: Profit Margin × Investment Turnover. The cost of the equipment is not relevant to the answer for this question as it has already been factored into the investment turnover. To solve for ROI, multiply 0.2876 by 0.2188 to arrive at 0.0629 (Choice A).