Reference no: EM132517965
Roomy Company provides business to business service on the internet. Data concerning the most recent year appear below:
Sales $ 9,000,000
Net Operating Income $ 900,000
Average operating Assets $ 3,200,000
Required: Consider each 3 questions below independently. Carry out all computation to two decimal places.
Question 1: Compute the company's return of investment (ROI)
Question 2: The company founder is convinced that sales will increase next year by 150% and that net operating income will increase by 400%, with no increase in average operating assets. What would be the company's ROI?
Question 3: The CFO of the company believes a more realistic scenario would be a $2 million increase in sales, requiring an $800,000 increase in average operating assets, with a resulting $250,000 increase in net operating income. What would be the company's ROI in this scenario?