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Apple Inc. has introduced a new series of iPhones. Below are the financial results for the first year of sales. Income Statement for the Year
Apple Inc. has introduced a new series of iPhones. Below are the financial results for the first year of sales.
Income Statement for the Year Ended December 31, 2023:
- Sales revenue: $2,000,000
- Cost of goods sold: $1,200,000
- Gross margin: $800,000
- Operating expenses: $400,000
- Depreciation expense: $100,000
- Operating income: $300,000
- Non-operating items: $50,000
- Net income: $250,000
Balance Sheet as of December 31, 2023:
- Assets:
- Cash: $100,000
- Accounts receivable: $300,000
- Merchandise inventory: $200,000
- Equipment (less accumulated depreciation): $500,000
- Total assets: $1,100,000
- Liabilities:
- Accounts payable: $200,000
- Notes payable: $300,000
- Total liabilities: $500,000
- Stockholders' equity: $600,000
Required:
- Calculate the ROI for the new iPhone series.
- Apple's headquarters has $200,000 available for investment in new technologies, expecting a minimum ROI of 15%. Calculate the new ROI if invested at an ROI of 18%.
- Assess the impact on the ROI if the funds are invested at an ROI of 10%.
- Discuss the potential benefits and challenges of reinvesting in new technology for Apple.
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