value: 7.00 points Albany Company calculated its return on investment as 14 perc

Question

value: 7.00 points Albany Company calculated its return on investment as 14 percent. Sales are now $269,000, and the amount of total operating assets is $449,000 Required a. If expenses are reduced by $26,900 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).) Answer is complete and correct. eturn on 19.99 % 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.) Answer is complete but not entirely correct. ssetsmus|decreased , 118,1570 rating a

Explanation / Answer

Operating income = 449000*14% = 62860

b) ROI = Operating income*100/Operating assets

    19.99 = 62860*100/X

X= Operating assets = 314457

Operating assets must be decrease by (449000-314457) = 134543

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