2. Evaluate Mr. McNeils new product proposal in Exhibit 3.
   1. Determine ROA assuming that sales volume of the new product is 100,000 units at $18/unit.
   2. Assume that Cash, Accounts Receivable, and Inventories estimates given by McNeil (Exhibit 3) are based on 100,000 units sold and vary with sales volume. Compute ROA for sales volume 75,000 units (at $21/unit) and ROA for 60,000 units (at $24/unit).

ENAGER INDUSTRIES, INC. Exhibit 3. Financial Data from New Product Proposal 1. Projected asset investment:* Cash Accounts receivable Inventories Plant and equipment Total $ 150,000 450,000 900,000 1,500,000 $3,000,000 2. Cost data: Variable cost per unit Differential fixed costs (per year) $9.00 $510,000 Price/market estimates (per year): Unit Price Unit Sales Break-even Volume $18.00 21.00 24.00 100,000 75,000 60,000 56,667 units 42,500 34,000 * Assumes 100,000 units' sales. Annual capacity of 120,000 units. $ Includes straight-line depreciation on new plant and equipment