The following data pertain to Napal Company for 20x1:

Required:
A. Calculate the company's sales margin, capital turnover, and return on investment for 20x1.
B. If the sales and average invested capital remain the same, to what level would total costs and expenses have to be reduced in 20x2 to achieve a 15% return on investment?
C. Assume that costs and expenses are reduced, as calculated in requirement "B." Calculate the firm's new sales margin.
D. Suggest two possible actions that will improve the company's capital turnover.

Question

The following data pertain to Napal Company for 20x1:

Required: 
A. Calculate the company's sales margin, capital turnover, and return on investment for 20x1.
B. If the sales and average invested capital remain the same, to what level would total costs and expenses have to be reduced in 20x2 to achieve a 15% return on investment?
C. Assume that costs and expenses are reduced, as calculated in requirement "B." Calculate the firm's new sales margin.
D. Suggest two possible actions that will improve the company's capital turnover.

Quizplus · Accepted Answer

The Answer of The following data pertain to Napal Company for 20x1:

Required: 
A. Calculate the company's sales margin, capital turnover, and return on investment for 20x1.
B. If the sales and average invested capital remain the same, to what level would total costs and expenses have to be reduced in 20x2 to achieve a 15% return on investment?
C. Assume that costs and expenses are reduced, as calculated in requirement "B." Calculate the firm's new sales margin.
D. Suggest two possible actions that will improve the company's capital turnover.

The Following Data Pertain to Napal Company for 20x1