Question
ZNet Co. is a web-based retail company. The company reports the following for 2015. Sales $ 16,920,000 Operating income 5,076,000 Average invested assets 28,200,000 The
ZNet Co. is a web-based retail company. The company reports the following for 2015. Sales $ 16,920,000 Operating income 5,076,000 Average invested assets 28,200,000 The companys CEO believes that sales for 2016 will increase by 30%, and both profit margin (%) and the level of average invested assets will be the same as for 2015. 1. Compute return on investment for 2015. 2. Compute profit margin for 2015. 3. If the CEOs forecast is correct, what will return on investment equal for 2016? 4. If the CEOs forecast is correct, what will investment turnover equal for 2016?
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