Ramsey Automotive Ltd. had sales of $3,500,000 and net operating income of $900,000 last year. Operating assets last year averaged $1,500,000. The company's manager is considering the purchase of a new machine which is expected to increase average operating assets by 20%.
Required: Calculate the company's new ROI if the new machine is purchased.

Question

Quizplus · Accepted Answer

The Answer of Ramsey Automotive Ltd. had sales of $3,500,000 and net operating income of $900,000 last year. Operating assets last year averaged $1,500,000. The company's manager is considering the purchase of a new machine which is expected to increase average operating assets by 20%.
Required: Calculate the company's new ROI if the new machine is purchased.