Fern Company Has a Target Rate of Return of 14

question 121

Multiple Choice

Fern Company has a target rate of return of 14%, an ROI of 38%, and capital turnover of 2.5. The sales margin for Fern Company would be closest to

• A)6%.
• B)15%.
• C)95%.
• D)35%.

---

Definitions:

Break Even

The point at which total cost and total revenue are equal, meaning there is no net loss or gain.

Stock Price

The cost of purchasing a share of a company, fluctuating based on market conditions, company performance, and investor sentiment.

Maximum Loss

The highest possible amount an investment might lose.

Call Contract

A financial contract that gives the buyer the right, but not the obligation, to buy a specified amount of an asset at a predetermined price within a specified time period.