Question

Use this information for Chicks Corporation to answer the question that follow. Chicks Corporation had $1,100,000 in invested assets, sales of $1,210,000, income from operations amounting to $302,500, and a desired minimum return of 15%. The profit margin for Chicks is

a. 15%
b. 25%
c. 27.5%
d. 22%

Answer 1

Option B.

Step-by-step explanation:

Given information:

Assets = $1,100,000

Sales = $1,210,000

Income or profit = $302,500

Formula for profit margin is

`\text{Profit margin}=(Profit)/(Sales)* 100`

Substitute the given values in the above formula.

`\text{Profit margin}=(302500)/(1210000)* 100`

On simplification we get

`\text{Profit margin}=25\%`

The profit margin for Chicks is 25%.

Therefore, the correct option is B.