Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2 What happens to the company EXERCISE 11-6 Effects of Changes in Sales, Expenses, and Assets on ROI [LO1] BusServ.com Corporation provides business-to-business services


2 What happens to the company EXERCISE 11-6 Effects of Changes in Sales, Expenses, and Assets on ROI [LO1] BusServ.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales.. Net operating income $8,000,000 $800,000 Required: Average operating assets. $3,200,000 Consider each question below independently. Carry out all computations to two decimal places. 1. Compute the company's return on investment (ROI). 2 The entrepreneur who founded the company is convinced that sales will increase next year by 150% and that net operating income will increase by 400%, with no increase in average operating assets. What would be the company's ROI? 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $2 million increase in sales, requiring an $800,000 increase in average operating assets. with a resulting $250,000 increase in net operating income. What would be the company's ROI in this scenario? 11011021

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To solve this problem well use the Return on Investment ROI formula textROI fracNet Operating IncomeAverage Operating Assets Given data Sales 8000000 Net Operating Income ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Project Management A Systems Approach to Planning Scheduling and Controlling

Authors: Harold Kerzner

10th Edition

978-047027870, 978-0-470-5038, 470278706, 978-0470278703

More Books

Students also viewed these General Management questions

Question

What was the result of this effort?

Answered: 1 week ago