Part 3 of 4 - Solve: If the seller invested $2,750,000 to produce this increased service level, what would the Return on Investment be? (Note: round to 1 decimal point. Do not enter percent sign or commas) Assume an organization's current service level on order fill is as follows: $ 2,750,000Investment 87% targeted service level see part 2 of 4 cash flow lost at 87% service level 75% Current order fill see part 1 of 4 cash flow lost at 75% service level 6000Number of orders per year 65% Percent of unfilled orders back-ordered 35% Percent of unfilled orders cancelled 175Back order costs per order 10,000Lost pretax profit per cancelled order Return on Investment Net return divided by the cost of the investment times 100.
Part 3 of 4 - Solve: If the seller invested $2,750,000 to produce this increased service level, what would the Return on Investment be? (Note: round to 1 decimal point. Do not enter percent sign or commas) Assume an organization's current service level on order fill is as follows: $ 2,750,000Investment 87% targeted service level see part 2 of 4 cash flow lost at 87% service level 75% Current order fill see part 1 of 4 cash flow lost at 75% service level 6000Number of orders per year 65% Percent of unfilled orders back-ordered 35% Percent of unfilled orders cancelled 175Back order costs per order 10,000Lost pretax profit per cancelled order Return on Investment Net return divided by the cost of the investment times 100.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Part 3 of 4 Solve : If the seller invested $2,750,000 to
produce this increased service level, what would the
Return on Investment be?
(Note: round to 1 decimal point. Do not enter percent
sign or commas)
Assume an organization's current service level on
order fill is as follows:
$ 2,750,000lnvestment
87%targeted service level
see part 2 of 4
cash flow lost at 87% service level
75%Current order fill
see part 1 of 4 cash flow lost at 75% service level
6000Number of orders per year
65%Percent of unfilled orders back-ordered
35%Percent of unfilled orders cancelled
$
175Back order costs per order
10,000Lost pretax profit per cancelled order
Return on Investment : Net return divided by the cost of
the investment times 100.
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