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War Eagle Beverages LLC ended 2 0 2 2 with Sales Revenue of $ 1 2 , 0 0 0 , 0 0 0 and

War Eagle Beverages LLC ended 2022 with Sales Revenue of $12,000,000 and COGS of $7,000,000. Total Overhead, otherwise known as Operating Expenses, was $2,500,000. Inventory has averaged $1,250,000 throughout the year and is at the same level at year-end. Net A/R is $750,000. Cash-on-hand is $800,000, and there are no Pre-Paid Expenses. Fixed Assets are $2,500,000. Assume there is no interest or taxes, so EBIT and Net Income will be the same.
We are projecting that if War Eagle Beverages LLC hires an AU SCMN grad to help them optimize inventory, they could deliver the same performance in 2023 but with $500,000 less investment in inventory. Sales, COGS, Cash, A/R, Prepaid Expenses, and Fixed Assets are projected to have the same values in 2023 as in 2022. Assume that inventory carrying costs (Holding Costs) are 22% and that the carrying cost savings from reduced inventories will reduce Total Overhead (Operating Expenses) but that Fixed Assets will not be affected. Also, assume that the Average Inventory throughout the year will be at the same level as at year-end. Use this information to answer the following questions:
What is the projected ROA for 2023?
Group of answer choices
Below 40%
Between 40% and 45%
Between 45% and 50%
Between 50% and 55%
Greater than 55%

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