The GMROII for a product with a gross margin of $50 and average inventory costs of $10 is:
A)2
B)4
C)5
D)7
E)9

Question

Quizplus · Accepted Answer

GMROII (Gross Margin Return On Inventory Investment) formula is GMROII = Gross Margin ÷ Average Inventory Cost.
Given that the gross margin is $50 and the average inventory cost is $10.
Therefore, GMROII = $50 ÷ $10 = 5. 
Hence, the answer is option C) 5, which is the best choice.

The GMROII for a Product with a Gross Margin of $50