???welcome-LookingGlas welcome-LookingGla | O case study 2 W WileyPLUs WileyPLUS

Question

???welcome-LookingGlas welcome-LookingGla | O case study 2 W WileyPLUs WileyPLUS x Mathway | Math proble KO nhttps/edugen.wileyplus.com/ed uni WileyPLUS Kimmel, Financial Accounting, 8e FINANCIAL ACCOUNTING (ACCT 221) Home Read. Study & Practice Gradebook ORION Downloadable eTextbook CALCULATOR MESSAGE HY PRINTER VERSION ASSIGNMENT RESOURCES Exercise 9-16 Lymen International is considering a significant expansion to its product line. The sales force is excited about the opportunities thet the new products will bring. The new products are a significent step up in quality above the compeny's current offerings, but offer a complementary fit to its existing product line. Fred Riddick, senior production department manager, is very excited about the high-tech new equipment that will have to be acquired to produce the new products. Barbara Dyson, the company's CFO, has provided the following projections based on results with and without the new products. Without New ith New Produ $16.082.000 5926,300 13,521,300 Products Sales revenue Net income Average total $12.249,200 S500,000 $5,496,100 Study Obiective (a) Compute the company's return on assets, profit margin, and asset turnover, both with and without the new product line. (Round answers to 0 decimal places, e.g. 20 and asset turnover to i decimal place, a.g. 6.2) Return on assets Profit margin Asset turnover By accessing this Question Assistancs, you will learn while you earn points based on the Point Potential Policy set by your instructor. Varsion 4.24.5.1 O Type here to search 924 PM 4/3/2018

Explanation / Answer

Answer a

Return on Assets = (Net income / Average total assets) * 100

Without new products = ($500,000 / $5,496,100) * 100 = 9 %

With new products = ($926,300 / $13,521,300) * 100 = 7 %

Answer b

Profit Margin = (Net income / Sales Revenue) * 100

Without new products = ($500,000 / $12,249,200) * 100 = 4 %

With new products = ($926,300 / $16,082,000) * 100 = 6 %

Answer c

Assets turnover =  Sales Revenue / Average total assets

Without new products = $12,249,200 / $5,496,100 =2.2

With new products = $16,082,000 / $13,521,300 = 1.2

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.