When operating profit ratio $25 %$ and Capital Turnover ratio $2 %$ . What is the return on investment?

75 %

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50 %

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25 %

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None of the above

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Solution

The correct option is B $50 %$
Return on Investment = Operating Profit Ratio*Capital turn over ratio = $25 %$ $\times$ $2 %$ = $50 %$

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When operating profit ratio 25% and Capital Turnover ratio 2%. What is the return on investment?

The correct option is B 50%Return on Investment = Operating Profit Ratio*Capital turn over ratio = 25% × 2% = 50%

When operating profit ratio $25 %$ and Capital Turnover ratio $2 %$ . What is the return on investment?

The correct option is B $50 %$
Return on Investment = Operating Profit Ratio*Capital turn over ratio = $25 %$ $\times$ $2 %$ = $50 %$