BusServ.com Corporation provides business-to-business services on the Internet.
ID: 2448501 • Letter: B
Question
BusServ.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
Sales $10,920,000
Net operating income $819,000
Average operating assets $4,200,000
The entrepreneur who founded the company is convinced that sales will increase next year by 160% and that net operating income will increase by 420%, with no increase in average operating assets. What would be the company’s margin, turnover and ROI? (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
The entrepreneur who founded the company is convinced that sales will increase next year by 160% and that net operating income will increase by 420%, with no increase in average operating assets. What would be the company’s margin, turnover and ROI? (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
Explanation / Answer
In the next year Sales increases by 160%, hence revised sales will be 17,472,000 $ Net Operating Income increases by 420%, hence the same will be 3,439,800 $ Average Operating Assets 4,200,000 $ ROI = Average Assets/Turnover 24.04%
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