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Unformatted text preview: APPLICATION PROBLEMS All work must be shown to receive any credit Question 34: Provide the missing data in the following table for a distributor of martial arts products: Division Alpha Bravo Charlie Sales $? $11,500,000 $? Net operating income.$? $ 920,000 $210,000 Average operating assets $800,000 $? $? Margin4% ? 7% Turnover. 5 ? ? Return on investment (ROI)... ? 20% 14% Question 35: Commercial Services.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.. Required: Consider each question below independently. Carry out all computations to two decimal points. 1. Compute the companys return on investment (ROI). 2. The entrepreneur who founded the company is convinced that sales will increase next year by 50% and that net operating income will increase by 200%, with no increase in average operating assets. What would be the companys ROI? 3. The chief financial officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring a $250,000 increase in average operating assets, with a resulting $200,000 increase in net operating income. What would be the companys ROI?...
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This note was uploaded on 01/18/2012 for the course DEP 235 taught by Professor Eeer during the Spring '11 term at Assoc. of Chartered Certified Accountants.
- Spring '11