If the Southern Division of American Products Company had a turnover ratio of 4.2 and a margin of 0.10, the return on investment would be
A)23.8%.
B)42.0%.
C)420.0%.
D)238.0%.

Question

Quizplus · Accepted Answer

The formula for return on investment (ROI) is margin x turnover ratio. Therefore, in this case, ROI = 0.10 x 4.2 = 0.42 or 42%. However, ROI is typically expressed as a percentage, so we need to multiply by 100 to get the answer in percentage form. Therefore, the ROI is 42% x 100 = 23.8%. The correct answer is A).

If the Southern Division of American Products Company Had a Turnover