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Unformatted text preview: income will need to be 15% of $45,000,000, or $6,750,000 . 4. Income will have to increase by 35%, ($6,750,000 $5,000,000)/$5,000,000, to achieve the goal of a 15% return on assets. The president has set a goal for an increase in sales of only 20%. To increase income by a larger percentage than the increase in sales will require cost-cutting in the various departments of the business. The company may want to look for cheaper sources of supply for its materials, as long as the quality of the product is maintained. Efforts will need to be made to cut selling, general, and administrative expenses as well....
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This note was uploaded on 05/25/2010 for the course MGMT 200 taught by Professor Greigg during the Spring '08 term at Purdue University-West Lafayette.
- Spring '08