Joe sends a scathing email to his boss regarding increased work hours. Joe tries to deny sending the email, but is unable to due
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Answer:
a) Baker's profit margin = 7.5%
b) No change on return on total assets
Explanation:
a) Assets Turnover = = 1.6 times
Return on total assets = = 12%
Then we have profit margin on sales = =
= 7.5%
b) In case asset turnover declined to 2 times with profit margin of 6% then Return on total assets = Asset turnover ratio X Profit Margin
= 2 X 6% = 12%
Thus there is no change in that case on return on total investments.
a) Baker's profit margin = 7.5%
b) Thus there is no change in that case on return on total investments.