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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:

  1. Calculate the ROI for the new iPhone series.
  2. 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%.
  3. Assess the impact on the ROI if the funds are invested at an ROI of 10%.
  4. Discuss the potential benefits and challenges of reinvesting in new technology for Apple.

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