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 $ 3,900,000 Net operating income $ 273,000 Average

CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:

Sales $ 3,900,000
Net operating income $ 273,000
Average operating assets $ 780,000

Garrison 16e Rechecks 2019-01-10

Exercise 11-13 Part 2

1. Compute the company's return on investment (ROI). (Do not round intermediate calculations. Round your answer to 2 decimal places.) ROI==(35%) 2. The entrepreneur who founded the company is convinced that sales will increase next year by 60% and that net operating income will increase by 100%, with no increase in average operating assets. What would be the companys ROI? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,150,000 increase in sales, requiring a $230,000 increase in average operating assets, with a resulting $105,750 increase in net operating income. What would be the companys ROI in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions