Final answer:
True, a company with a 10% profit margin must generate approximately 10 times the lost profit in revenue to restore net income to its pre-fraud level due to the relationship between profit margin and revenue.
Step-by-step explanation:
The statement that manufacturing companies with a profit margin of 10 percent must usually generate about 10 times as much revenue as the dollar amount of the fraud in order to restore net income to its pre-fraud level is true. This is because the profit margin is the percentage of revenue that becomes profit. Therefore, if the profit margin is 10%, for every dollar of profit earned, the company must generate $10 in revenue. If there was fraud and the company lost $1 in profit, they would need to generate an additional $10 in revenue to compensate for that lost dollar and bring their net income back up to its pre-fraud level.