Question
Exercise 11-13 Effects of Changes in Sales, Expenses, and Assets on ROI [LO11-1] [The following information applies to the questions displayed below.] CommercialServices.com Corporation provides
Exercise 11-13 Effects of Changes in Sales, Expenses, and Assets on ROI [LO11-1]
[The following information applies to the questions displayed below.]
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 |
1. Compute the company's return on investment (ROI). (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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.)
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