Exercise 9-16 Lymen International is considering a significant expansion to its

Question

Exercise 9-16 Lymen International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring The new products are a significant step up in quality above the company'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 Products With New Products Sales revenue Net income Average total assets $16,952,400 $867,900 $13,964,700 $12,333,000 $459,000 $5,251,700 (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. 2% and asset turnover to 1 decimal place, eg. 6.2) Without new products With new products Return on assets Profit margin Asset turnover Click if you would like to Show Work for this question Show Wo LINK TO TEXT

Explanation / Answer

Without new products: Return on assets 9% =459000/5251700 Profit margin 4% =459000/12333000 Asset turnover 2.3 =12333000/5251700 With new products: Return on assets 6% =867900/13964700 Profit margin 5% =867900/16952400 Asset turnover 1.2 =16952400/13964700

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