Exercise 9-16

Lymen International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring. The new products are a significant step up in quality above the companys current offerings, but offer a complementary fit to its existing product line. Fred Riddick, senior production department manager, is very excited about the high-tech new equipment that will have to be acquired to produce the new products. Barbara Dyson, the companys CFO, has provided the following projections based on results with and without the new products.

		Without New Products			With New Products
Sales revenue		$12,149,200			$16,618,200
Net income		$488,900			$885,800
Average total assets		$5,282,800			$13,930,400

(a)	Compute the companys return on assets, profit margin, and asset turnover, both with and without the new product line. (Round answers to 0 decimal places, e.g. 2% and asset turnover to 1 decimal place, e.g. 6.2)

		Without new products		With new products
Return on assets		%		%
Profit margin		%		%
Asset turnover

International sidering offerings, xut offer compl step up with New Products Sales 2,145.20 Average tel Without new products with now products ej abou: red Riddick, bring. Th producti depart