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JC Goods, Inc. has a profit margin of 10% and a total assets turnover of 0.30. The president believes that the existing return on assets might be quadrupled and is dissatisfied with it. One way to do this is by raising the profit margin to 15%, and another is by raising the total assets turnover. What new asset turnover ratio is necessary to double the return on assets in addition to the 15% profit margin? a. 35% b. 45% c. 40% d. 50

JC Goods, Inc. has a profit margin of 10% and a total assets turnover of 0.30. The president believes that the existing return on assets might be quadrupled and is dissatisfied with it. One way to do this is by raising the profit margin to 15%, and another is by raising the total assets turnover. What new asset turnover ratio is necessary to double the return on assets in addition to the 15% profit margin? a. 35% b. 45% c. 40% d. 50

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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JC Goods, Inc. has a profit margin of 10% and a total assets turnover of 0.30. The president believes that the existing return on assets might be quadrupled and is dissatisfied with it. One way to do this is by raising the profit margin to 15%, and another is by raising the total assets turnover.
What new asset turnover ratio is necessary to double the return on assets in addition to the 15% profit margin?

a. 35%
b. 45%
c. 40%
d. 50% 

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