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Please show me all the steps including the formula used but typed please. Thank you very much. 4. The following practice problem is based on
Please show me all the steps including the formula used but typed please. Thank you very much.
4. The following practice problem is based on the lecture slide on ROA effect. I kept the original numbers intact but have changed the percentage reduction to 20%. For simplicity, assuming operating expense is 0 (which is unrealistic, I know). Inventory $150,000 $135,000 A/R $70,000 Current Assets $250,000 $235,000 Fixed Assets $250,000 Total Assets $500,000 Cash $30,000 $485,000 ROA 10% Direct Labor $200,000 Sales $1 million 20.6% Profit $50,000 Raw Material $500,000 COGS $950,000 $100,000 $900,000 $450,000 Overhead $250,000 4.1 With a 20% reduction in raw material procurement cost, what is the new inventory number? Answer: 120000 4.2 With a 20% reduction in raw material procurement cost, what is the new cost of raw material? Answer: 400,000 4.3 What is the new profit margin? Answer: 15% 4.4 What is the new ROA? Answer: 32% 4.5 What is the new total assets? Answer: 470000Step by Step Solution
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