Badger Limited had a sales margin of 7%, sales of $8,000,000, and invested capital of $4,000,000. The company's ROI was:

Question

Quizplus · Accepted Answer

ROI (Return on Investment) can be calculated using the formula: net income / invested capital. We are given the sales margin, which is net income / sales, so we can calculate the net income as $560,000 (7% of $8,000,000). Substituting these values into the formula, we get ROI = $560,000 / $4,000,000 = 0.14, or 14%. Therefore, the correct answer is D.

Badger Limited Had a Sales Margin of 7%, Sales of $8,000,000