Delta Airlines has recently acquired a smaller regional airline. The following financial statements provide a snapshot of Delta's financial position post-acquisition.

Income Statement for the Year Ended December 31, 2023:

• Sales revenue: $1,500,000
• Cost of goods sold: $900,000
• Gross margin: $600,000
• Operating expenses: $300,000
• Depreciation expense: $50,000
• Operating income: $250,000
• Non-operating items: $20,000
• Net income: $230,000

Balance Sheet as of December 31, 2023:

• Assets:
  • Cash: $50,000
  • Accounts receivable: $200,000
  • Merchandise inventory: $150,000
  • Equipment (less accumulated depreciation): $400,000
  • Total assets: $800,000
• Liabilities:
  • Accounts payable: $150,000
  • Notes payable: $200,000
  • Total liabilities: $350,000
  • Stockholders' equity: $450,000

Required:

1. Calculate the ROI for Delta.
2. Delta's headquarters has $150,000 of funds to assign to its divisions, with a desired ROI of 10%. Calculate the new ROI for Delta if the funds are invested at an ROI of 12%.
3. Assess the impact on the ROI if the funds are invested at an ROI of 8%.
4. Discuss the potential benefits and risks of investing the additional funds in Delta.