Question
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales $3,000,000 Net operating income $150,000 Average operating assets
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales $3,000,000 Net operating income $150,000 Average operating assets $750,000 Consider each of the following requirements independently. Requirement 1: Compute the company's return on investment (ROI). Return on investment % ? Requirement 2: The entrepreneur who founded the company is convinced that sales will increase next year by 50% and that net operating income will increase by 200%, with no increase in average operating assets. What would be the company's ROI? Return on investment % ? Requirement 3: The chief financial officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring an $250,000 increase in average operating assets, with a resulting $200,000 increase in net operating income. What would be the company's ROI in this scenario? Return on investment %?
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