CommercialServices.com Corporation provides business-to-business services on the internet. See data in excel spreadsheet.
1. Compute the company's return on investment.
2. The entrepreneur who founded the company is convinced that sales will increase next year by 50% and that net operating income will increase by 200%, with no increase in average operating assets. What will the company's ROI?
3. The chief Financial officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring a $250,000 increase in average operating assets, with a resulting $200,000 increase in net operating income. What would be the Company's ROI in this senario?
1. ROI = Net Operating Income/Average Operating Assets = 150,000/750,000 = 20%
2. New ...
The solution explains the calculation of return on investment in different situations.