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ID: 2518662 • Letter: R
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[The following information applies to the questions displayed below.]
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,950,000 increase in sales, requiring a $390,000 increase in average operating assets, with a resulting $393,875 increase in net operating income. What would be the company’s ROI in this scenario? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Return on investment (ROI)% ______%
Sales $ 4,700,000 Net operating income $ 188,000 Average operating assets $ 940,000Explanation / Answer
3. Return on investment (ROI) = Net Operating income / Average operating assets
= ($188,000 + $393,875) / ($940,000 + $390,000)
= $581,875 / $1,330,000
= 43.75%
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