Ramsey Automotive Ltd.had sales of $2 000 000 and net operating income of $600 000 last year.Operating assets last year averaged $1 000 000.The company's manager is considering the purchase of a new machine which is expected to increase average operating assets by 6 per cent.
Required:
Calculate the company's new ROI if the new machine is purchased.

Question

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The Answer of Ramsey Automotive Ltd.had sales of $2 000 000 and net operating income of $600 000 last year.Operating assets last year averaged $1 000 000.The company's manager is considering the purchase of a new machine which is expected to increase average operating assets by 6 per cent.
Required:
Calculate the company's new ROI if the new machine is purchased.