Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 15-22 Return on investment LO 15-6 Finch Corporation's balance sheet indicates that the company has $560,000 invested in operating assets. During 2018, Finch earned

image text in transcribed
image text in transcribed
Problem 15-22 Return on investment LO 15-6 Finch Corporation's balance sheet indicates that the company has $560,000 invested in operating assets. During 2018, Finch earned operating income of $62,720 on $1,120,000 of sales. Required a. Compute Finch's profit margin for 2018 b. Compute Finch's turnover for 2018 c. Compute Finch's return on investment for 2018. d. Recompute Finch's ROI under each of the following independent assumptions: (1) Sales increase from $1,120,000 to $1,344,000, thereby resulting in an increase in operating income from $62720 to $67,200 (2) Sales remain constant, but Finch reduces expenses, resulting in an increase in operating income from $62,720 to $64.960. (3) Finch is able to reduce its invested capital from $560,000 to $448,000 without affecting operating income. Complete this question by entering your answers in the tabs below. Reg A to C Reg D Compute Finch's profit margin, turnover and return on investment for 2018. (Round "Profit margin" and "Return on Investment" to 1 decimal place.) a Profit margin b. Turnover C Return on investment RegD > Problem 15-22 Return on investment LO 15-6 Finch Corporation's balance sheet indicates that the company has $560,000 invested in operating assets. During 2018, Finch earned operating income of $62.720 on $1120,000 of sales Required a. Compute Finch's profit margin for 2018 b. Compute Finch's turnover for 2018 c. Compute Finch's return on investment for 2018 d. Recompute Finch's ROI under each of the following independent assumptions: (1) Sales increase from $1,120,000 to $1,344,000, thereby resulting in an increase in operating income from $62,720 to 567,200 (2) Sales remain constant, but Finch reduces expenses, resulting in an increase in operating income from $62,720 to $64.960 (3) Finch is able to reduce its invested capital from $560,000 to $448,000 without affecting operating income Complete this question by entering your answers in the tabs below. Reg A toc Reg D Recompute Finch's ROI under each of the following independent assumptions: (Do not round Intermediate calculations. Round your answers to 2 decimal places. (.e. 2345 should be entered as 23.45).) (1) Sales increase from $1,120,000 to $1,344,000, thereby resulting in an increase in operating income from $62,720 to $67,200. (2) Sales remain constant but Finch reduces expenses, resulting in an increase in operating income from 562.720 to $64,960. (3) Finch is able to reduce its invested capital from $550,000 to $448,000 without affecting operating income Show less Return on investment I

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions