Division Y has generated sales revenue of $260,000 and achieved operating income of $18,500 using $20,000 of invested assets.If management desires a minimum rate of return of 10%, the profit margin would be:
A) 19.5%.
B) 14.4%.
C) 10.2%.
D) 7.1%.

Question

Quizplus · Accepted Answer

Profit margin is calculated as (Operating Income / Sales Revenue) * 100. Here, it is ($18,500 / $260,000) * 100 = 7.1%.

Division Y Has Generated Sales Revenue of $260,000 and Achieved