Sales and average operating assets for Company P and Company Q are given below:

Sales Average Operating Assets

Company P $20,000 $10,000

Company Q $50,000 $8,000

What is the margin that each company (Company P and Company Q, respectively) will have to earn in order to generate a return on investment of 20%?

Multiple Choice

1) 12% and 16%.

2) 10% and 3.2%.

3) 50% and 100%.

4) 2.5% and 5%.