cornerstones 3rd eddition by Hansen, Don R

#3

The records for the Venusian Division show the following data:

Asset base $500,000

Sales Revenues $725,000

Expenses $662,500

Required:

a. what is the margin, turnover, and ROI for Venusian Division?

b. Venusian has an option to make an additional investment that would add $100,000 to the asset base. It would generated an additional $50,000 in sales revenue and no additional expenses. What would be the effect on margin, turnover, and ROI?.

c. Another alternative (independent of alternative 'b') for Venusian is to run an advertising campaign that would require additional advertsising expenses of $37,500, but the best estimate is the campaign would generate an additional $75,000 of revenue. What would be the effect on margin, turnover, and ROI?