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What would be the company roi

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Reference no: EM13506188

Omaha Company provides the following information:

Sales

$4,000,000

Net operating income

400,000

Average operating assets

1,600,000

Consider each question independently. Carry out all computations to two decimal places.

Required:

a) Compute the company's return on investment.

b) The owner is convinced that sales will increase next year by 150% and that net operating income will increase by 100%, with no increase in average operating assets. What would be the company's ROI?

c) The chief financial officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring a $400,000 increase in average operating assets, with a resulting $250,000 increase in net operating income. What would be the company's ROI in this situation?

 

Reference no: EM13506188

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