If the Profit Margin for a Division Is 8% and the Investment

question 174

True/False

If the profit margin for a division is 8% and the investment turnover is 1.2, the return on investment is 9.6%.

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Definitions:

IAS 17

An international accounting standard that provides guidance on the accounting and financial reporting of leases.

Unqualified Audit Report

An auditor's report that is issued when an auditor determines that all of the financial records provided by a company are free of material misstatement, indicating a clean bill of health.

Financial Leases

Covers the entire expected life of the equipment; does not provide for maintenance service, is not cancellable, and is fully amortized.

NPV

Net Present Value; a calculation used to determine the value of a project or investment by discounting future cash flows to the present.