Answer:
6.00%
Explanation:
The company's desired return amount is given by the ROI multiplied by the amount invested, in this case, the average operating assets:
[tex]R=0.12*\$250,000\\R=\$30,000[/tex]
The margin required in order to achieve a return of $30,000 is given by:
[tex]M= \frac{R}{sales} =\frac{\$30,000}{\$500,000} \\M= 0.06 = 6.00\%[/tex]
Allargando Company's margin must be 6% in order to achieve a ROI of 12%.
