Ex 24-12 Determining missing items in rate of return computation

One item is omitted from each of the following computations of the rate of return on investment:

Rate of Return on Investment = Profit Margin × Investment Turnover
            12%              =      5%       ×       (a)
            (b)              =      8%       ×       2.00
            14%              =     (c)       ×       1.40
           13.5%             =      6%       ×       (d)
            (e).             =     15%       ×       1.20
Determine the missing items, identifying each by the appropriate letter.


Answer:
a. 2.40 = 12% ÷ 5%
b. 16% = 8% × 2.00
c. 10% = 14% ÷ 1.40
d. 2.25 = 13.5% ÷ 6%
e. 18% = 15% × 1.20