Question

Required information Exercise 11-13 Effects of Changes in Sales, Expenses, and Assets on ROI (LO11-1] [The following information applies to the questions displayed below.] CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below: Sales Net operating income Average operating assets $ $ $ 4,700,000 188,000 940,000 The following questions are to be considered independently. Exercise 11-13 Part 3 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,950,000 increase in sales, requiring a $390,000 increase in average operating assets, with a resulting $393,875 increase in net operating income. What would be the company's ROI in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI)

Answer 1

Answer:- margin = Net operating income ? sales $581,875 = $188,000 + $393,875 $ 4700,000+ $1950,000 $6650,000 = 875 ol. Turnoves sales = € Average Operating assets $6650,000 $940,000 + $399,000 $ 6650,000 $ 1330,000 is Return on investment (ROT) – margin x luonnover 8.75%x5 = 43.75 %