The Central Division for Chemical Company has a return on investment of 22% and an investment turnover of 1.4. The profit margin is
A)20%
B)15.7%
C)14%
D)6.36%

Question

Quizplus · Accepted Answer

The profit margin is calculated by dividing the return on investment (ROI) by the investment turnover. Here, ROI is 22% and investment turnover is 1.4. So, the profit margin = ROI / Investment Turnover = 22% / 1.4 = 15.7%.

The Central Division for Chemical Company Has a Return on Investment