Solution:
1) |
Return on Investment (ROI for this year) |
|
Net Operating Income (A) |
$1,814,600 |
|
Average Invested/Operating Assets (B) |
$4,220,000 |
|
Return on Investment (A/B*100) |
43.00% |
|
2) |
Return on Investment (ROI for the new product line by itself) |
|
Net Operating Income (A) (Refer Note below) |
$633,500 |
|
Average Invested/Operating Assets (B) |
$2,262,500 |
|
Return on Investment (A/B*100) |
28.00% |
|
Note: |
||
Sales |
$9,050,000 |
|
Less: Variable Costs (65% of sales) |
$5,882,500 |
|
Less: Fixed Expenses |
$2,534,000 |
|
Net Operating Income |
$633,500 |
|
3) |
Return on Investment (ROI for next year including new product |
|
Net Operating Income (A) (Refer Note below) |
$2,448,100 |
|
Average Invested/Operating Assets (B) |
$6,482,500 |
|
Return on Investment (A/B*100) |
37.76% |
|
Note: |
||
Net Operating Income this year |
$1,814,600 |
|
Plus: Net Operating Income from new product |
$633,500 |
|
Total Operating Income |
$2,448,100 |
|
Average Operating Assets this year |
$4,220,000 |
|
Plus: Operating Assets related to new product line |
$2,262,500 |
|
Total Average Operating Assets |
$6,482,500 |
4)
Accept
New product line would be accepted because the ROI from new product line is higher than the overall ROI 18% of the company.
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"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Offi...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. “But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
“I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.” Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," sald Dell Havasi, manager of Billings Company's Office Products Division "But I want to see the numbers before I make any move. Our division's return on Investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROM) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of rol, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
“I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.” Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
“I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.” Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
“I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.” Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...