Question
I need the solution to this question. Please include all steps. BossServ.com Corp provides business to business services on the internet. Data concerning the most
I need the solution to this question. Please include all steps. BossServ.com Corp provides business to business services on the internet. Data concerning the most recent year appear below:
Sales- $8,000,000
Net operating income- $800,000
Average operating assets $3, 200,000
Required: Consider each question below independently and carry out computations to two decimal places.
1. Compute the company's return of investment (ROI)
2. The entrepreneur who found the company is convinced that sales will increase next year b 150% and that net operating income will increase by 400%, with no increase in average operating assets. What would the company's ROI be?
3. The chief financial officer of the company believes a more realistic scenario would be a $2 million increase in sales, requiring an $800,000 increase in average operating assets, with a resulting $250,000 increase in net operating income. What would the company's RIO be in this scenario?
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