Question 6:

Net operating incomes 30,000

Sales 500,000

Average operating assets 200,000

Comput the ROI

(a) increase sales assume that connect company is able to increase sales to 600,000 and net operating incomes increases to 42,000. Also assume operating assets are not affected

(b) Reduce expenses- assume that connect company is able to reduce expenses by 10,000. Also assume that sales and operating assets are not affected.

(ensure correct)