The Southern Division of Knucklehead Company Has a Return on Investment

question 12

Multiple Choice

The Southern Division of Knucklehead Company has a return on investment of 15% and an investment turnover of 1.2. What is the profit margin?

• A) 1.5%
• B) 12.5%
• C) 0.67%
• D) 6.67%

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Definitions:

Absolute Advantage

The ability of an individual, company, or country to produce a good or service at a lower cost per unit than the cost at which any other entity can produce it.

Opportunity Costs

The loss of potential gain from other alternatives when one particular option is chosen over others.

Predatory Dumping

A practice where a company exports a product at a price significantly lower than its normal value, with the intention to drive out competition in the import country.

Sporadic Dumping

Occurs when a company exports a product at a price significantly lower than the price in its domestic market, but does so irregularly or occasionally.