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evalisezamot
13.12.2019 •
Business
Return on investment lo a1, a2 znet co. is a web-based retail company. the company reports the following for 2017. sales $ 23,160,000 operating income 6,948,000 average invested assets 38,600,000 the company’s ceo believes that sales for 2018 will increase by 40%, and both profit margin (%) and the level of average invested assets will be the same as for 2017.
1. compute return on investment for 2017.
2. compute profit margin for 2017.
3. if the ceo’s forecast is correct, what will return on investment equal for 2018?
4. if the ceo’s forecast is correct, what will investment turnover equal for 2018?
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Ответ:
2017
ROI = 18%
Profit Margin = 30%
2018
ROI = 25.2%
Investment Turnover = 84%
Explanation:
The formulas for the required ratio are as follows,
ROI = Operating income / Average invested assets
Profit margin = Operating Income / Sales
For 2017,
ROI = 6,948,000 / 38,600,000 = 0.18 = 18%
Profit margin = 6,948,000 / 23,160,000 = 0.3 = 30% of sales
For 2018, we compute increased sales first
Sales = 23,160,000 * 1.4 = $32,424,000 after 40% increase
with profit margin staying the same, profit for 2018
Profit = $32,424,000 * 0.3 = $9,727,200
Using the earlier formulas,
ROI = $9,727,200 / 38,600,000 = 0.252 = 25.2%
Investment turnover = Sales / Average invested assets
Investment Turnover = $32,424,000 / 38,600,000 = 0.84 = 84%
Hope that helps.
Ответ:
1. Return on investment for 2017
ROI = Operating income/Average invested assets x 100
ROI = $6,948,000/$38,600,000 x 100
ROI = 18%
2. Profit margin for 2017
Profit margin
= Operating income/Sales x 100
= $6,948,000/$23,160,000 x 100
= 30%
3. Forecast sales for 2018
= 140% x $23,160,000
= $32,424,000
Forecast operating income for 2018
= 140% x $6,848,000
= $9,587,200
Return on investment in 2018
ROI = $9,587,200/$38,600,000 x 100
ROI = 24.84%
4. Investment turnover for 2018
= Sales/Average invested assets x 100
= $32,424,000/$38,600,000
= 0.84 times
Explanation:
Return on investment is the ratio of operating income to average invested assets
Profit margin is the ratio of operating income to sales
Since forecast sales in 2018 increased by 40%, thus, the forecast sales are 140% of original sales (140% x $23,160,000), Increase in sales increases the operating income by 40% (140% x $6,948,000).
Investment turnover is the ratio of sales to average invested assets.
Ответ:
total product costs = $101750
Explanation:
given data
overhead costs = $ 100
Direct materials of $41,000
direct manufacturing labor = 450
per hour = $35
markup rate = 30 %
solution
we get here total product costs that is express as
total product costs = Direct materials + DML + MOH 1
total product costs = $41,000 + ( 450 × $35 ) + ( 450 × $100 )
total product costs = $41,000 + $15750 + $45000
total product costs = $101750