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Neptune Corporation has various segments. The following financial statements belong to the segment named Tau Segment. Tau Segment Income Statement for the Year Ended June

Neptune Corporation has various segments. The following financial statements belong to the segment named "Tau Segment."

Tau Segment Income Statement for the Year Ended June 30, Year 24:

  • Sales Revenue: $950,000
  • Cost of Goods Sold: $570,000
  • Gross Margin: $380,000
  • Operating Expenses: $210,000
  • Depreciation Expense: $130,000
  • Operating Income: $40,000
  • Nonoperating Income: $100,000
  • Loss on Sale of Machinery: $90,000
  • Net Income: $50,000

Tau Segment Balance Sheet as of June 30, Year 24:

  • Cash: $140,000
  • Accounts Receivable: $175,000
  • Inventory: $200,000
  • Machinery (less accumulated depreciation): $550,000
  • Total Assets: $1,065,000
  • Accounts Payable: $160,000
  • Notes Payable: $170,000
  • Stockholders' Equity: $735,000

Required:

  1. Compute the ROI for Tau Segment.
  2. Neptune Corporation has a target ROI of 36%. Tau Segment has an investment opportunity of $1,200,000 at an ROI of 38%. Calculate the new ROI if the investment is made.
  3. Determine the net profit margin for Tau Segment.
  4. Calculate the asset turnover ratio for Tau Segment.
  5. Assess whether Tau Segment achieved the desired ROI after the new investment.

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