What is the return on investment

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Question - You are presented with additional information regarding the overall operations of Gentry Manufacturing that currently operates as a privately held firm. You learn that the overall financial results of the company indicate that they have an annual operating income of $15 million, with $125 million allocated towards research and development costs for an upcoming project. However, recent accounting updates suggest that the annual operating income generated would be $7.5 million due to changing economic conditions and consumer preferences.

What is the return on investment (ROI) based upon original estimates? What is the ROI if the new operating income projections are used?

During the next upcoming internal meeting for managers and executives, what advice would you provide to the CEO when she must present a report regarding the proposed project and anticipated results?

Assume that the organization has plans to "go public" with an initial public stock offering next year. Would your advice change?

What responsibility does the CEO have to other Gentry employees (including Jim), other managers, the board of directors, and potential venture capitalists?

Reference no: EM131624000

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