Question
Required information [The following information applies to the questions displayed below.] The following data pertain to British Isles Aggregates Company, a producer of sand, gravel,
Required information
[The following information applies to the questions displayed below.]
The following data pertain to British Isles Aggregates Company, a producer of sand, gravel, and cement, for the year just ended.
Sales revenue | 6,200,000 | ||
Cost of goods sold | 2,596,000 | ||
Operating expenses | 3,232,000 | ||
Average invested capital | 1,550,000 | ||
denotes the British pound sterling, the national monetary unit of Great Britain.
3-a. Assuming that the expenses and cost of goods sold are reduced in order to improve the firm's ROI to 30 percent, compute the firm's new sales margin.
3-b. Show how the new sales margin and the old capital turnover together result in a new ROI of 30 percent.
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