Ralston Company Has Income from Operations of $75,000, Invested Assets

question 55

Short Answer

Ralston Company has income from operations of $75,000, invested assets of $360,000, and sales of $790,000.
Use the DuPont formula to calculate the rate of return on investment, and show (a) the profit margin, (b) the investment turnover, and (c) rate of return on investment. Round the profit margin percentage to two decimal places and the investment turnover to three decimal places.

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Definitions:

Purely Competitive

A market configuration where numerous small businesses produce the same goods and face no entry or exit obstacles.

Pure Competition

A market structure characterized by a large number of buyers and sellers, homogeneous products, and the absence of barriers to entry or exit for firms.

Profit-maximizing Level

The output level at which a firm achieves the highest possible profit, determined by the point where marginal revenue equals marginal cost.