A company reports profit of $70 000 and net sales of $950 000.Which of the following is the rate of return on net sales?
A)0.05
B)0.07
C)0.20
D)0.66

Question

Quizplus · Accepted Answer

To find the rate of return on net sales, we divide the profit by the net sales and multiply by 100 to get a percentage:
($70 000/$950 000) x 100 = 0.0737 x 100 = 7.37%
Round off to the nearest hundredth, we get 7.37% which is approximately equal to 0.07. Therefore, the answer is B.

A Company Reports Profit of $70 000 and Net Sales