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For the past year, Allargando Company recorded sales of $500,000 and average operating assets of $250,000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of 12%? Multiple Choice 6.00% 12.00% 2.00% 8.33%

Respuesta :

pedrocarratore

Answer:

6.00%

Explanation:

The company's desired return amount is given by the ROI multiplied by the amount invested, in this case, the average operating assets:

[tex]R=0.12*\$250,000\\R=\$30,000[/tex]

The margin required in order to achieve a return of $30,000 is given by:

[tex]M= \frac{R}{sales} =\frac{\$30,000}{\$500,000} \\M= 0.06 = 6.00\%[/tex]

Allargando Company's margin must be 6% in order to achieve a ROI of 12%.