Fill in the Blank QuestionFill in the blank question.A division reports the following figures: Profit margin = 20%; Investment turnover = 0.5. The division's return on investment is %.
Question
Fill in the Blank QuestionFill in the blank question.A division reports the following figures: Profit margin = 20%; Investment turnover = 0.5. The division's return on investment is %.
Solution
The division's return on investment is calculated by multiplying the profit margin by the investment turnover.
Step 1: Convert the profit margin to a decimal. 20% becomes 0.20. Step 2: Multiply the profit margin (0.20) by the investment turnover (0.5).
0.20 * 0.5 = 0.10
So, the division's return on investment is 10%.
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