Flash Corporation Has Operating Income of $180,000, a Profit Margin

question 67

Multiple Choice

Flash Corporation has operating income of $180,000, a profit margin of 15%, and asset turnover of 2.0. The return on investment (ROI) for Flash Corporation would be closest to

• A) 8%.
• B) 2%.
• C) 30%.
• D) 125%.

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Definitions:

Input

Resources such as labor, materials, and energy that are used in the production process of goods or services.

Production Function

A mathematical representation that describes the relationship between inputs used in production and the resulting output.

Output

The aggregate sum of products or services generated by a business, sector, or economic system.

Cost

The value of everything a company gives up to produce goods or services, including materials, labor, and overhead expenses.