Question
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales $ 5,980,000 Net operating income $ 448,500 Average
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: |
Sales | $ | 5,980,000 |
Net operating income | $ | 448,500 |
Average operating assets | $ | 2,600,000 |
Required information
Required: | ||||||||||||||||
1. | Compute the company's margin, turnover and return on investment (ROI). (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 12.34%.)) | |||||||||||||||
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2. | The entrepreneur who founded the company is convinced that sales will increase next year by 160% and that net operating income will increase by 420%, with no increase in average operating assets. What would be the companys ROI? (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 12.34%.))
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3. | The Chief Financial Officer of the company believes a more realistic scenario would be a $2,000,000 increase in sales, requiring a $60,000 increase in average operating assets, with a resulting $325,560 increase in net operating income. What would be the companys ROI in this scenario? (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 12.34%.)) | |||||||||||||||||
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