Everything that is in boxes thus far is correct. Albany Company calculated its r

Question

Everything that is in boxes thus far is correct.

Albany Company calculated its return on investment as 12 percent. Sales are now $268,000, and the amount of total operating assets is $454,000. Required If expenses are reduced by $26,800 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places, (i.e.,.2345 should be entered as 23.45).) If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)

Explanation / Answer

Statement showing computations Particulars Amount Sales           268,000.00 Total operating assets           454,000.00 Return on Investment 12% Return or Net income in $ =454,000*.12              54,480.00 a) If expenses are reduced by 26,800 then income would increase by $26,800              81,280.00 Return on Investment = 81,280/454,000 17.90% b) Required Return on Investment 17.90% Return or Net income in $                54,480.00 Total Operatimg Assets = 54,480/17.90%           304,357.54 Operating assets must be decreased by $149,642.46 (454,000 - 304,357.54)

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