Largo Company recorded for the past year sales of $414,400 and average operating assets of $259,000. What is the margin that Largo Company needed to earn in order to achieve an ROI of 28.8%?

A. 18.00%

B. 1.60%

C. 28.80%

D. 3.47%

A. 18.00%

Explanation:

In this question, first we have to apply the return on investment formula so that the net income value could find out which is shown below:

Return on investment = Net Income : Average Operating Assets * 100

28.8% = Net Income : $259,000

So, the Net income would be

= $74,592

Now the margin would be

= Net income : Sales * 100

= $74,592 : $414,400 * 100

= 18%