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Ring Company reports the following for 2020. Operating income $80,000 Average operating assets $ 300,000 Sales $ 600,000 Operating expenses $ 520,000 Required: a.Calculate the

Ring Company reports the following for 2020.

Operating income $80,000

Average operating assets $ 300,000

Sales $ 600,000

Operating expenses $ 520,000

Required:

a.Calculate the ROI for 2020. (6 marks)

b.Ring company plans to invest in a $50,000 equipment that increases sales by $55,000, while increasing operating expenses by $25,000. What is the expected ROI? Should the company go for this plan? Explain. (12 marks)

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