Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Thornton Company calculated its return on investment as 10 percent. Sales are now $460,000, and the amount of total operating assets is $480,000. Required
Thornton Company calculated its return on investment as 10 percent. Sales are now $460,000, and the amount of total operating assets is $480,000. Required a. If expenses are reduced by $44,400 and sales remain unchanged, what return on investment will result? Note: Round your percentage answer to 2 decimal places. (i.e., 0.2345 should be entered as 23.45). b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? Note: Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount. a. Return on investment 19.25% b. Operating assets must decrease by $ 2,494
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a To calculate the return on investment ROI after reducing expenses by 44400 while keeping sales unc...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started