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Global Tech has numerous units. The following financial statements apply to the unit named Zeta Unit. Zeta Unit Income Statement for the Year Ended September

Global Tech has numerous units. The following financial statements apply to the unit named "Zeta Unit."

Zeta Unit Income Statement for the Year Ended September 30, Year 15:

  • Sales Revenue: $500,000
  • Cost of Goods Sold: $300,000
  • Gross Margin: $200,000
  • Operating Expenses: $100,000
  • Depreciation Expense: $50,000
  • Operating Income: $50,000
  • Nonoperating Income: $40,000
  • Loss on Sale of Equipment: $20,000
  • Net Income: $70,000

Zeta Unit Balance Sheet as of September 30, Year 15:

  • Cash: $60,000
  • Accounts Receivable: $85,000
  • Inventory: $100,000
  • Equipment (less accumulated depreciation): $160,000
  • Total Assets: $405,000
  • Accounts Payable: $60,000
  • Notes Payable: $70,000
  • Stockholders' Equity: $275,000

Required:

  1. Compute the ROI for Zeta Unit.
  2. Global Tech has a target ROI of 22%. Zeta Unit has an investment opportunity of $300,000 at an ROI of 24%. Calculate the new ROI if the investment is made.
  3. Determine the net profit margin for Zeta Unit.
  4. Calculate the asset turnover ratio for Zeta Unit.
  5. Assess if Zeta Unit met the desired ROI after the new investment.

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