Optimal profit from margin and asset efficiency

Steps:

• Compute profit margin: 1 - expenses-to-revenue ratio.
• Derive revenue: non-current asset turnover × non-current assets (assets assumed equal).
• Calculate profit: turnover × assets × profit margin.
• Compare values to identify maximum profit.

Why B is correct:

• Formula profit = turnover × (1 - expense ratio) × assets shows B's 6× turnover and 80% margin yield highest value (4.8 × assets), as increased revenue generation exceeds minor margin drop from A.

Why the others are wrong:

• A: Superior 82% margin but 4× turnover limits revenue, yielding 3.28 × assets profit.
• C: 80% margin and 4× turnover combine for lowest profit at 3.2 × assets.
• D: 80% margin but assume lower turnover or higher expenses reduces profit below B's level.

Final answer: B