Carey, Inc. provides the following information
Profit margin ratio 5%
Asset turnover ratio 2 times
Net sales $450,000
Target rate of return 9%
Calculate the return on investment.
A) 10%
B) 45%
C) 4%
D) 14%
A .A)
ROI = Profit margin ratio x Asset turnover ratio
ROI = 5% x 2.00 = 10%
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