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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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BuyFindarrow_forward

Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Determining missing items in return on investment computations

One item is omitted from each of the following computations of the return on investment

Determine the missing items, identifying each by the appropriate letter.

To determine

Concept Introduction:

Profit Margins: It is a measure which is generally used by the organization to find out the best department in the organization in terms of profit. To calculate the profit margins divide the profits with sales.

Return on investment: In this we divide the total return or profit with the investment into the assets of organization. It is the best way of calculating the % of return in the business.

To Calculate:

Find out the missing figure?

Explanation

a. = ROI/ Profit margin

= 12%/8%

= 1.5

b. = Profit margin* Investment Turnover

= 16%* 1.25

= 20%

c. = ROI/ Investment Turnover

= 24%/ 1...

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