Question

CH 22 #4

Check my work 4 Exercise 22-15 Return on investment LO A1, A2 1.42 points ZNet Co. is a web-based retail company. The company reports the following for the past year. Sales Operating income Average invested assets $ 14,100,000 7,050,000 28,200,000 eBook The company's CEO believes that sales for next year will increase by 10%, and both profit margin (%) and the level of average invested assets will be the same as for the past year. Hint 1. Compute return on investment for the past year. 2. Compute profit margin for the past year. 3. If the CEO's forecast is correct, what will return on investment equal next year? 4. If the CEO's forecast is correct, what will investment turnover equal for next year? Print References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute return on investment for the past year. Choose Numerator: 1 Return on Investment Choose Denominator: Average invested assets Return on Investment Return on investment Operating income $ 7,050,000 1 $ 28,200,000 25.00% < Required 1 Required 2 >

Answer 1

3	Return on Investment
	Choose Numerator	/	Choose Denominator	=	Return on Investment
	Operating Income	/	Avg. Invested Assets	=	Return on Investment
	7,755,000	/	28,200,000	=	27.50%
4	Investment Turnover
	Choose Numerator	/	Choose Denominator	=	Investment Turnover
	Sales	/	Average invested assets	=	Investment Turnover
	15,510,000	/	28,200,000	=	0.55