A company had a profit margin of 5%.If net income equaled $83,000 and average total assets equaled $45,000,how much were net sales?
A)$4,150
B)$2,250
C)$1,660,000
D)$6,400
E)$128,000

Question

Quizplus · Accepted Answer

We can use the formula:
Profit Margin = (Net Income / Net Sales) x 100%
We know that profit margin is 5% and net income is $83,000. 
Let x be the net sales. 
5% = ($83,000 / x) x 100%
0.05 = $83,000 / x
x = $83,000 / 0.05
x = $1,660,000
Therefore, the answer is C.

A Company Had a Profit Margin of 5