Chapter 11, Problem 16E

1.

To determine

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

:

The return on investment (ROI) of the company.

2.

To determine

Return on Investment or asset establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

:

The new return on investment (ROI) of the company, if sales will increase by 50% and net operating income will increase by 200%, and there is no increase in average operating assets.

3.

To determine

Return on Investment establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

:

The new return on investment (ROI) of the company, if sales are increased by $1,000,000, average operating assets are increased by $250,000, and net operating income is increased by $200,000.