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31 October, 05:17

Maizy Enterprises has a target rate of return of 11%, an ROI of 90%, and capital turnover of 4.5. The sales margin for Maizy Enterprises may be closest to

2%

50%

20%

405%

+1
Answers (1)
  1. 31 October, 05:50
    0
    20%

    Explanation:

    The amount of profit earned from the sales is known as sales margin. It is the profit at the sales level of a single transaction.

    We already have the value of ROI, we need to calculate the the sales margin value using this formula.

    Return On Capital Investment = Sales Margin x Capital Turnover

    90% = Sales Margin x 4.5

    0.9 = Sales Margin x 4.5

    Sales Margin = 0.9 / 4.5 = 0.2

    Sales Margin = 20%
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