C O Not Secure The folowing information applies to me questions displeyed below
ID: 2329771 • Letter: C
Question
C O Not Secure The folowing information applies to me questions displeyed below Charle's Funiture Store has been in business for several years. The firm's owners have described the store os a ggee, Nghsener" operation that povides its of assistance to its customers Mmgin hal averaged a reanively high 375 per year for several years, but tumover has been a relatively low 0.2 based on average sotal assers of $400,000. A discount Furnhure Stoe is about to open in the area served by Chartlie's, and management is considering lowering prices so compete efflectively Required information 0.83 points Required Caloulate cument sales and ROl for Charlie's Funiture Store (Round your "ROr to 1 decimal place. Sales RO b. Asung tat tonew strategy wold muce marn to 20%, and assning tat average ital assets would stay the same, caloulate the sales that would be required to have the same ROI as Charie's cumenty eams. (Do not round your intermediate calioulations 160,000 c Suppose you presented the resuls of your analysis in parts a and b of this problem to Charlie, and he roduco my pr ces as piamed then I have to practcally doiable my replied, "What are you te ing me? sales volume to eam the same retun Given the resuts of your analysis, what is the actual amount of norease in sales required? (Do not round your intermediate calculations) OMB3200 EAI Dat...lsxFall 2018-2(200 Show AllExplanation / Answer
a.
ROI = Margin x Turnover = 0.33 x 0.20 = 0.066 or 6.6 %
b.
ROI = Margin x Turnover.
0.066 = 0.20 x Turnover.
Turnover = Sales / Assets = 0.066 / 0.20 = 0.33.
Sales = $ 400,000 x 0.33 = $ 132,000.
c.
d.
Sales $ 80,000 ROI 6.6 %Related Questions
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