CommercialServices.com Corporation provides business-to-business services on the
ID: 2554476 • Letter: C
Question
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
References
Section BreakExercise 9-13 Effects of Changes in Sales, Expenses, and Assets on ROI [LO9-1]
3.
value:
3.75 points
Required information
Exercise 9-13 Part 1
Compute the company's margin, turnover and return on investment (ROI). (Round your Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
References
eBook & Resources
WorksheetDifficulty: 2 Medium
Exercise 9-13 Part 1Learning Objective: 09-01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI.
Check my work
4.
value:
3.75 points
Required information
Exercise 9-13 Part 2
The entrepreneur who founded the company is convinced that sales will increase next year by 160% and that net operating income will increase by 420%, with no increase in average operating assets. What would be the company’s ROI? (Round your Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
References
eBook & Resources
WorksheetDifficulty: 2 Medium
Exercise 9-13 Part 2Learning Objective: 09-01 Compute return on investment (ROI) and show how changes in sales, expenses, and assets affect ROI.
Check my work
5.
value:
3.75 points
Required information
Exercise 9-13 Part 3
The Chief Financial Officer of the company believes a more realistic scenario would be a $4,000,000 increase in sales, requiring a $840,000 increase in average operating assets, with a resulting $610,250 increase in net operating income. What would be the company’s ROI in this scenario? (Round your Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
References
eBook & Resources
WorksheetDifficulty: 2 Medium
Exercise 9-13 Part 3
[The following information applies to the questions displayed below.]CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
Explanation / Answer
Part 1:
Margin
Net operating income/Sales
1058200/9620000
11%
Turnover:
Sales/Average operating assets
9620000/3700000
2.6
ROI:
Margin* Turnover
11%*2.6
28.6
Part 2:
Margin
Net operating income/Sales
1058200(1+1.6)/9620000(1+4.2)
0.055
Turnover:
Sales/Average operating assets
9620000(1+4.2)/3700000
13.52
ROI:
0.055*13.52
74.36%
Part 3:
Margin
Net operating income/Sales
[1058200+610250]/[9620000+4000000]
1668450/13620000
0.1225
Turnover:
Sales/Average operating assets
13620000/[3700000+840000]
13620000/4540000
3
ROI:
36.8%
Part 1:
Margin
Net operating income/Sales
1058200/9620000
11%
Turnover:
Sales/Average operating assets
9620000/3700000
2.6
ROI:
Margin* Turnover
11%*2.6
28.6
Part 2:
Margin
Net operating income/Sales
1058200(1+1.6)/9620000(1+4.2)
0.055
Turnover:
Sales/Average operating assets
9620000(1+4.2)/3700000
13.52
ROI:
0.055*13.52
74.36%
Part 3:
Margin
Net operating income/Sales
[1058200+610250]/[9620000+4000000]
1668450/13620000
0.1225
Turnover:
Sales/Average operating assets
13620000/[3700000+840000]
13620000/4540000
3
ROI:
36.8%