Saturday, 10 May 2014

CommercialServices.com Corporation provides business-to-business services on the Internet.

CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
 
  Sales $8,400,000  
  Net operating income $800,000  
  Average operating assets $3,200,000  

   
Consider each of the following requirements independently.
 
Requirement 1:
Compute the company's return on investment (ROI). (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)
 
  Return on investment (ROI) %  
 
Requirement 2:
The entrepreneur who founded the company is convinced that sales will increase next year by 40% and that net operating income will increase by 160%, with no increase in average operating assets. What would be the company's ROI? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

  Return on investment (ROI) %  
 
Requirement 3:
The chief financial officer of the company believes a more realistic scenario would be a $1,900,000 increase in sales, requiring a $800,000 increase in average operating assets, with a resulting $330,000 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. Omit the "%" sign in your response.)
   
  Return on investment (ROI) %  

rev: 05_03_2012, 05_16_2012

Explanation: