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Optix International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring.
Optix 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. Frank Renolds, senior production department manager, is very excited about the high-tech new equipment that will have to be acquired to produce the new products. Carol Fischer, the companys CFO, has provided the following projections based on results with and without the new products. Without New Products With New Products Sales $10,000,000 $18,000,000 Net income $800,000 $1,800,000 Average total assets $5,000,000 $15,000,000 Instructions (a) Compute the companys return on assets ratio, profit margin ratio, and asset turnover ratio, both with and without the new product line. (b) Discuss the implications that your findings in part (a) have for the companys decision
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