Question

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: Sales - Net operating income Average operating assets $ $ $ 2,400,000 144,000 800,000 The following questions are to be considered independently. Exercise 10-13 Part 3 3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,250,000 increase in sales, requiring a $112,500 increase in average operating assets, with a resulting $440,000 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)

Answer 1

Requirement 3:

Sales =$2,400,000 + $1,250,000 =$3,650,000
Net operating income $144,000 +$440,000 =$584,000
Average operating assets= $800,000 +$112,500 =$912,500

ROI = NET OPERATING INCOME / OPERATING ASSETS * 100

ROI = 584,000/912,500 =0.64 i.e 64%