The following data pertain to British Isles Aggregates Company, a producer of sa

Question

The following data pertain to British Isles Aggregates Company, a producer of sand, gravel, and cement, for the year just ended. Sales revenue£6,450,000 Cost of goods sold Operating expenses Average invested capital 3,003,000 3,253,500 3,225,000 S denotes the British pound sterling, the national monetary unit of Great Britain. Exercise 13-33 Part 2 2. If the sales and average invested capital remain the same during the next year, to what level would total expenses have to be reduced in order to improve the firm's ROl to 10 percent? Total expenses must be educed to

Explanation / Answer

Return required = 3225000*10% = 322500 Total expenses must be reduced to $6127500 (6450000-322500)

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