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Unformatted text preview: c Yes; because the incremental after-tax ROI exceeds the required return. return of 15 % d Required Level of Inventory = Increase in Sales / Inventory Turnover Required Level of Inventory = $80,000 / 4 Required Level of Inventory = $20,000 Required Level of A/R $ 16,000 Required Level of Inventory 20,000 Total Incremental Investment $ 36,000 Gregory Mann FIN 200 e No; because the incremental after-tax ROI less than the required return. Incremental After Tax ROI = $4,480 / $36,000 Incremental After Tax ROI = 12.44%...
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This note was uploaded on 10/21/2010 for the course FIN 200 AAAA0RWSC4 taught by Professor Mchenry during the Spring '10 term at University of Phoenix.
- Spring '10