Question

Kragle Corporation reported the following financial data for one of its divisions for the year; average invested assets of $470,000; sales of $930,000; and income of $105,000. The investment center profit margin is:a) 22.3%b)50.5%c)197.9%d)447.6%e) 11.3%

Answer 1

Answer:

The correct option is E that is 11.30%

Explanation:

The formula to compute the profit margin is as:

Profit margin = Operating Income / Sales

where

Operating income is $105,000

Sales is $930,000

Putting the values in the formula:

Profit margin = $105,000 / $930,000

Profit Margin = 11.29% or 11.30%

Therefore, the investment centre profit margin will be 11.30%.