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    Return on investment

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    Using the formula Rate of return on investment) = Profit margin x Investment turnover
    Calculate the return of investment for the following division results:
    Sales $8,928,000
    Income from operation $650,000
    Profit margin $ 4,385,000

    a) Margin __________/_______________=______________
    Investment turnover _________/____________=_______________
    Return on investement _________x___________=____________

    b) If the company expects a ROI of 13? Has the company met the targeted ROI? Yes or no and why?

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    Solution Preview

    a. Margin = Income from Operations/Sales = 650,000/8,928,000 = ...

    Solution Summary

    The solution explains how to calculate the return on investment.