Tesla has launched a new model of electric vehicles. The financial performance for the first year is as follows.

Income Statement for the Year Ended December 31, 2023:

• Sales revenue: $6,000,000
• Cost of goods sold: $3,500,000
• Gross margin: $2,500,000
• Operating expenses: $1,000,000
• Depreciation expense: $400,000
• Operating income: $1,100,000
• Non-operating items: $50,000
• Net income: $1,050,000

Balance Sheet as of December 31, 2023:

• Assets:
  • Cash: $300,000
  • Accounts receivable: $1,200,000
  • Merchandise inventory: $700,000
  • Equipment (less accumulated depreciation): $2,500,000
  • Total assets: $4,700,000
• Liabilities:
  • Accounts payable: $1,000,000
  • Notes payable: $1,200,000
  • Total liabilities: $2,200,000
  • Stockholders' equity: $2,500,000

Required:

1. Calculate the ROI for Tesla’s new electric vehicle model.
2. Tesla’s headquarters has $500,000 to allocate for new projects, aiming for a 15% ROI. Calculate the new ROI if the funds are invested at an ROI of 20%.
3. Determine the effect on ROI if the investment yields only 10%.
4. Evaluate the strategic benefits and potential risks of investing additional funds in the new model.