question archive Roark Company has income from operations of $40,000, invested assets of $160,000, and sales of $320,000
Roark Company has income from operations of $40,000, invested assets of $160,000, and sales of $320,000
Subject:AccountingPrice:2.89 Bought3
Roark Company has income from operations of $40,000, invested assets of $160,000, and sales of $320,000. Use the DuPont formula to compute the rate of return on investment and show
(a) The profit margin.
(b) The investment turnover, and
(c) The rate of return investment.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
(a) Profit Margin = $40,000/$320,000
Profit Margin = 12.5%
(b) Investment Turnover = $320,000/$160,000
Investment Turnover = 2.0
(c) Rate of Return on Investment = Total profit percentage × Investment Turnover
Rate of Return on Investment = 12.5% × 2.0
Rate of Return on Investment = 25 %
