Compute Profit Margin Ratio Given the Following Information

question 24

Multiple Choice

Compute profit margin ratio given the following information.

• A) 6.63%
• B) 7.03%
• C) 93.8%
• D) 6.2%
• E) 88.33%

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Definitions:

Pretax Return

Pretax return is the income generated by an investment or business before taxes are deducted.

Net Present Value

The divergence in current value between cash receipts and disbursements over a set period.

Investment Projects

Initiatives undertaken by businesses to invest in resources with the expectation of generating future revenues or reducing costs.

Discount Factor

A factor employed in the discounted cash flow (DCF) methodology to calculate the current value of anticipated cash flows.