For the past year, Allargando Company recorded sales of $409,500 and average operating assets of $273000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of 10.5%?

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For the past year, Allargando Company recorded sales of $409,500 and average operating assets of $273000. What is the margin that Allargando Company needed to earn in order to achieve an ROI of 10.5%?

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Answer =7 % margin

Current ROI is as follow

ROI= Revenue / Operating Assets

=273000/409500

Margin=Net operating ÷SalesMargin

Turnover to operating assets ia as follow

=409500/273000

=1.5

ROI=Margin x Turnover

0.105 =.06×1.5

0.105/1.5

=0.07

7%

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