Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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%.))

Margin %
Turnover
ROI %

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%.))

Margin %
Turnover
ROI %
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%.))

Margin %
Turnover
ROI %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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_2

Step: 3

blur-text-image_3

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

Financial Accounting A User Perspective

Authors: Robert E. Hoskin, Maureen R. Fizzell, Donald C. Cherry

4th Canadian Edition

0470834455, 978-0470834459

More Books

Students also viewed these Accounting questions

Question

3. Provide unexpected, spontaneous, and genuine praise.

Answered: 1 week ago