Albany Company calculated its return on investment as 14 percent. Sales are now

Question

Albany Company calculated its return on investment as 14 percent. Sales are now $267,000, and the amount of total operating assets is $458,000 Required a If expenses are reduced by $26,700 and sales remain unchanged, what return on investment will result? (Round your answer to 2 decimal places. (i.e., 2345 should be entered as 23.45).) eturn on invest b. If both sales and expenses cannot be changed, what change in the amount of operating assets is required to achieve the same result? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.) erating assets must be

Explanation / Answer

a Net Income 64120 Reduction In Expense 26700 Net Income after reduction Expense 90820 Return on Investment =90820/458000 19.83% b Operating Asset Must be Reduced by 134647 458000- (64120/19.83)

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