If sales = $100,000, turnover = 2.0, and ROI = 10 percent, then Blank______.Multiple choice question.net income = $5,000 and margin = 5%net income = $20,000 and margin = 5%net income = $5,000 and margin = 10%net income = $10,000 and margin is indeterminable
Question
If sales = 100,000, turnover = 2.0, and ROI = 10 percent, then Blank______.Multiple choice question.net income = 5,000 and margin = 5%net income = 5,000 and margin = 10%net income = $10,000 and margin is indeterminable
Solution
To answer this question, we first need to understand what each term means:
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Sales: This is the total amount of money made from selling goods or services. In this case, it's $100,000.
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Turnover: This is the rate at which inventory is sold and replaced. In this case, it's 2.0.
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ROI (Return on Investment): This is a measure of the profitability of an investment. It's calculated by dividing the net profit from the investment by the cost of the investment. In this case, it's 10 percent.
Given these definitions, we can calculate the net income and margin as follows:
Net income = Sales x ROI Net income = 10,000
Margin = Net income / Sales Margin = 100,000 = 10%
So, the correct answer is: "net income = $10,000 and margin = 10%"
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