Question

Manyops, inc, is a manufactunng tein that has experienced strong compettion in its tradtional business tumover or 2 was required. If the company sifts its operations from manurfacturing to a. calculate net income, margin, and sales required for Manyops inc. , to acheve its tärget Ro ompettion in ts tradtional business Management is considering joning the trend to the "service economy by elminatng ts trc , has had a target RC1 of 18% specialzed maintenance services to other manufacturers. Mänagement of on an asset base that has averaged $8 milion To achieve this ROI, a it is estmated that average total assets will decrease to $4 million l as a manufacturng firm n Enter your »Sales" and "Net income" answers in million s (i.e., 10,000,000 should be entered as 1oj Do not round intermediate calculations. Round your answers to 2 decimal places 9003% 16 00 million ms s a so 179 Calculate he net com sales and toral asset u avert at Manyops nc wil have tine char e to services is made and the firm is able to earn an average margn and achieve an 17% ROl (Enter your "Sales" and "Net income" answers in millions (l.e., 10.000,000 should be entered as 1o). Do not round intermediate calculations. Round your answers to 2 decimal places.)) b Assume that the average margin of maintenance service r s is s 3% and that the a erage O for such 0.68 million 5 15

don't know sales for the last one

Answer 1

a. Manufacturing Firm Calculation of Net Income ROI Average Assets Net Income (Average Asset 18% 8 million s*ROI) (8 million *18%) 1.44 million = Calculation of Sales Total Asset Turnover 2 Total Asset Turnover = (Net Sales / Average total assets) So Net Sales = Average total Assets * Total asset turnover Net Sales (8 million*2) 16 million Calculation of Margin Margin = (Net Income / Sales) (1.44 million / 16 million) 9%