Florida Inc. has revenues of $757,000 resulting in an operating income of $121,120. Average invested assets total $380,000; the cost of capital is 18%. The profit margin is Solution Profit margin = Operating Income / Total Revenues x 100 = $121,120 / $757,000 x 100 = 0.16 x 100 = 16% Answer is B => 16.00% .

1. Florida Inc. has revenues of $757,000 resulting in an operating income of $121,120. Average
invested assets total $380,000; the cost of capital is 18%. The profit margin is
Florida Inc. has revenues of $757,000 resulting in an operating income of $121,120. Average
invested assets total $380,000; the cost of capital is 18%. The profit margin is
Solution
Profit margin = Operating Income / Total Revenues x 100
= $121,120 / $757,000 x 100
= 0.16 x 100
= 16%
Answer is B => 16.00%