Question

1. Stevenson has operating income of $99,000, sales of $660,000, and $550,000 in invested assets. The company has established a minimum rate of return of 15%. What is Stevenson’s profit margin?

   	A.	15%
   	B.	7.5%
   	C.	18%
   	D.	20%
   	E.	none of these

QUESTION 25

1. Stevenson has operating income of $99,000, sales of $660,000, and $550,000 in invested assets. The company has established a minimum rate of return of 15%. What is Stevenson’s investment turnover?

   	A.	1.0
   	B.	none of these
   	C.	1.1
   	D.	1.2
   	E.	1.3

Answer 1

Answer: The correct answer is A i.e. 15%

Profit Margin = Operating Income / Sales * 100
Profit Margin = $99,000 / $660,000 * 100
Profit Margin = 15%

Answer of Question 25: The correct answer is D i.e. 1.2

Investment Turnover = Sales / Invested Assets
Investment Turnover = $660,000 / $550,000
Investment Turnover = 1.2 times