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If margin = 5 percent, net income = $100,000, and turnover = 4.0, then Blank______.Multiple choice question.ROI = 20%, average total assets = $500,000, and sales = $2,000,000ROI = 20%, average total assets = $1,000,000, and sales = $4,000,000ROI = 10%, average total assets = $500,000, and sales = $4,000,000ROI = 15%, average total assets = $500,000, and sales = $5,000,000

Question

If margin = 5 percent, net income = 100,000, and turnover = 4.0, then Blank______.Multiple choice question.ROI = 20%, average total assets = 500,000, and sales = 2,000,000ROI=202,000,000ROI = 20%, average total assets = 1,000,000, and sales = 4,000,000ROI=104,000,000ROI = 10%, average total assets = 500,000, and sales = 4,000,000ROI=154,000,000ROI = 15%, average total assets = 500,000, and sales = $5,000,000

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Solution

The formula for ROI (Return on Investment) is:

ROI = (Net Income / Total Assets) * 100%

We know that Net Income = $100,000.

We also know that Margin = Net Income / Sales. So, we can rearrange this to find Sales = Net Income / Margin = 100,000/0.05=100,000 / 0.05 = 2,000,000.

Turnover is defined as Sales / Total Assets. We can rearrange this to find Total Assets = Sales / Turnover = 2,000,000/4=2,000,000 / 4 = 500,000.

Now we can calculate ROI = (100,000/100,000 / 500,000) * 100% = 20%.

So, the correct answer is: ROI = 20%, average total assets = 500,000,andsales=500,000, and sales = 2,000,000.

This problem has been solved

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