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Question

0 Required information [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 $ 5,460,000 $ 273,000 $910,000 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,800,000 increase in sales, requiring a $300,000 increase in average operating assets, with a resulting $362,250 increase in net operating income. What would be the company's ROl in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Return on investment (ROI)

Explanation / Answer

Answer 3.

Sales = $5,460,000 + $1,800,000
Sales = $7,260,000

Average Operating Assets = $910,000 + $300,000
Average Operating Assets = $1,210,000

Net Operating Income = $273,000 + $362,250
Net Operating Income = $635,250

ROI = Net Operating Income / Average Operating Assets
ROI = $635,250 / $1,210,000
ROI = 52.50%

Answer 2.

Sales = $5,460,000 + $5,460,000 * 50%
Sales = $8,190,000

Average Operating Assets = $910,000

Net Operating Income = $273,000 + $273,000 * 200%
Net Operating Income = $819,000

ROI = Net Operating Income / Average Operating Assets
ROI = $819,000 / $910,000
ROI = 90.00%