Shonrock International is considering a significant expansion to its product lin

Question

Shonrock International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring. The new products are a significant step up in quality above the companys current offerings, but offer a complementary fit to its existing product line. Richard Farley, senior production department manager, is very excited about the high-tech new equipment that will have to be acquired to produce the new products. Compute the companys return on assets, profit margin, and asset turnover, both with and without the new product line.

Explanation / Answer

Without new product With New products The company's return on assets 8.7% 6.2% The company's profit margin 3.8% 5.1% The company's asset turn over 227.8% 120.9%

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