Facebook has developed a new social media platform. The following financial statements outline the first-year performance.

Income Statement for the Year Ended December 31, 2023:

• Sales revenue: $3,500,000
• Cost of goods sold: $2,000,000
• Gross margin: $1,500,000
• Operating expenses: $600,000
• Depreciation expense: $200,000
• Operating income: $700,000
• Non-operating items: $30,000
• Net income: $670,000

Balance Sheet as of December 31, 2023:

• Assets:
  • Cash: $150,000
  • Accounts receivable: $500,000
  • Merchandise inventory: $300,000
  • Equipment (less accumulated depreciation): $1,200,000
  • Total assets: $2,150,000
• Liabilities:
  • Accounts payable: $400,000
  • Notes payable: $600,000
  • Total liabilities: $1,000,000
  • Stockholders' equity: $1,150,000

Required:

1. Calculate the ROI for Facebook’s new social media platform.
2. Facebook’s headquarters has $250,000 to invest in new technology, expecting an ROI of 15%. Calculate the new ROI if the funds are invested at an ROI of 18%.
3. Assess the impact on the ROI if the investment yields only 10%.
4. Discuss the strategic advantages and potential challenges of reinvesting in the new platform.