Largo Company recorded for the past year sales of $750,000 and average operating assets of $375,000.What is the margin that Largo Company needed to earn in order to achieve an ROI of 15%?
A) 2.00%
B) 15.00%
C) 9.99%
D) 7.50%

Question

Quizplus · Accepted Answer

Turnover = Sales ÷ Average operating assets
= $750,000 ÷ $375,000 = 2
ROI = Margin × Turnover
15% = Margin × 2
Margin = 15% ÷ 2 = 7.5%

Largo Company Recorded for the Past Year Sales of $750,000