Sony has launched a new gaming console. The financial results for the first year are shown below.

Income Statement for the Year Ended December 31, 2023:

• Sales revenue: $5,000,000
• Cost of goods sold: $3,000,000
• Gross margin: $2,000,000
• Operating expenses: $900,000
• Depreciation expense: $300,000
• Operating income: $800,000
• Non-operating items: $50,000
• Net income: $750,000

Balance Sheet as of December 31, 2023:

• Assets:
  • Cash: $200,000
  • Accounts receivable: $900,000
  • Merchandise inventory: $700,000
  • Equipment (less accumulated depreciation): $1,500,000
  • Total assets: $3,300,000
• Liabilities:
  • Accounts payable: $600,000
  • Notes payable: $800,000
  • Total liabilities: $1,400,000
  • Stockholders' equity: $1,900,000

Required:

1. Calculate the ROI for Sony’s new gaming console.
2. Sony’s headquarters has $300,000 available for investment, targeting an ROI of 15%. Calculate the new ROI if the funds are invested at an ROI of 20%.
3. Evaluate the effect on ROI if the funds are invested at an ROI of 10%.
4. Discuss the strategic advantages and potential risks of reinvesting in the new gaming console.