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Purpose: Compute the return on investment for an investment center KSAs: Understand DuPont formula, investment turnover, and rate of return on investment Points: 10 Admin:
Purpose: Compute the return on investment for an investment center KSAs: Understand DuPont formula, investment turnover, and rate of return on investment Points: 10 Admin: None Discussion Initial Response Due by Wednesday: The owner of Java Java Java Coffee Carts is considering ways to increase the return on investment. The condensed income statement for the company is below (assume no support department charges). For calculations, round your answers for the profit margin and the rate of return on investment to the nearest whole number, round your answer for the investment turnover to two decimal places. Part 1: Using the DuPont formula for return on investment, determine the following, assuming that additional assets of $110,000,000 have been invested in the company. 1. profit margin 2. investment turnover 3. rate of return on investment Part 2: If expenses could be reduced by $5,377,100 without decreasing sales, what would be the impact on the following: 1. profit margin 2. investment turnover 3. rate return on investment
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