Exercise 10-13 Effects of Changes in Sales, Expenses, and Assets on ROI [LO10-1]
[The following information applies to the questions displayed below.]
CommercialServices.com Corporation provides business-to-business services on the Internet. Data concerning the most recent year appear below:
| Sales | $ | 3,000,000 |
| Net operating income | $ | 150,000 |
| Average operating assets | $ | 750,000 |
1. Compute the company's return on investment (ROI).
2. The entrepreneur who founded the company is convinced that sales will increase next year by 50% and that net operating income will increase by 200%, with no increase in average operating assets. What would be the company’s ROI?
3. The Chief Financial Officer of the company believes a more realistic scenario would be a $1,000,000 increase in sales, requiring a $250,000 increase in average operating assets, with a resulting $200,000 increase in net operating income. What would be the company’s ROI in this scenario? (Do not round intermediate calculations.)
In: Accounting
Considering what you have learned about the impact of environment, heredity, body system changes associated with aging, and lifestyle choices throughout life, discuss the question: physiologically, do people become more alike or less alike with aging?
In: Nursing
Kindly select all the normal age-related physiological changes and in one or two sentences explain your answer.
a. Decline in visual acuity
b. Decrease respiratory rate
c. Increased heart rate
d. Increase susceptibility to urinary tract infection (UTI)
e. Decline in long-term memory
f. Increased incidence of awakening after sleep onset
In: Nursing
Describe and discuss changes to our society and environment(i.e. economic power, affluence, and individualism) impact gender roles. Provide detailed examples from our readings and/or experiences. (do not copy and paste a response from a Google search)
In: Psychology
1.Now state legislators want to make predictions about how changes in consumers’ budgets will impact their consumption behavior. If school supplies and salty snacks are both normal goods with school supplies on the x-axis of the graph and salty snacks on the y-axis, explain how a decrease in consumers’ budgets would impact the consumption of school supplies and salty snacks.
b)Can school supplies be an inferior good at all budget levels? What might the relationship between budget and consumption of school supplies look like?
In: Economics
1.Now state legislators want to make predictions about how changes in consumers’ budgets will impact their consumption behavior. If school supplies and salty snacks are both normal goods with school supplies on the x-axis of the graph and salty snacks on the y-axis, explain how a decrease in consumers’ budgets would impact the consumption of school supplies and salty snacks.
a) Suppose instead that state legislators think school supplies are an inferior good. If consumers’ budgets decrease, explain what would happen to the consumption of both school supplies and salty snacks
In: Economics
Changes in Various Ratios
Presented below is selected information for Brimmer Company:
| 2013 | 2012 | |
|---|---|---|
| Sales revenue | $913,000 | $840,000 |
| Cost of goods sold | 578,000 | 542,000 |
| Interest expense | 23,000 | 20,000 |
| Income tax expense | 30,000 | 24,000 |
| Net income | 64,000 | 52,000 |
| Cash flow from operating activities | 68,000 | 55,000 |
| Capital expenditures | 45,000 | 45,000 |
| Accounts receivable (net), December 31 | 129,000 | 120,000 |
| Inventory, December 31 | 199,000 | 160,000 |
| Stockholders' equity, December 31 | 453,000 | 400,000 |
| Total assets, December 31 | 733,000 | 660,000 |
Required
Calculate the following ratios for 2013. The 2012 results are given
for comparative purposes.
Round answers to one decimal place. Use 365 days in a year.
| 2012 | 2013 | |||
|---|---|---|---|---|
| 1. Gross profit percentage | 35.5% | % | ||
| 2. Return on assets | 8.3% | % | ||
| 3. Return on sales | 6.2% | % | ||
| 4. Return on common stockholders' equity | ||||
| (no preferred stock was outstanding) | 13.9% | % | ||
| 5. Accounts receivable turnover | 8.0 | |||
| 6. Average collection period | 45.6 | days | days | |
| 7. Inventory turnover | 3.6 | |||
| 8. Times-interest-earned ratio | 4.8 | |||
| 9. Operating-cash-flow-to-capital-expenditures ratio | 1.2 |
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In: Accounting
In: Accounting
1.
Your current income is equal to 50 000 When your income changes by 12,500, your consumption expenditure changes by 7,500.
What is the value of the marginal propensity to consume
(MPC)?
MPC =________(enteryour response rounded to one or two decimal places as
appropriate).
2.
What is the difference between gross investment and net investment? Can gross investment be positive when net investment isnegative?
A.The difference is equal to depreciated capital; No.
B.Gross investment is the overall increase in the capital stock; No.
C.Gross investment is the overall increase in the capital stock;Yes
D.Net investment is the overall increase in the capital stock;Yes.
3.
Define the expected real after-tax interest rate.
A.[(1−tax rate)×real interest rate]−expected inflation rate.
B.[(1−tax rate)×nominal interest rate]+expected inflation rate.
C.[(1−tax rate)×nominal interest rate]−expected inflation rate.
D.(1−tax rate)×nominal interest rate.
If the tax rate on interest income declines, what happens to the expected real after-tax interest rate?
A.It decreases.
B.It increases.
C.It remains constant.
D.It is ambiguous.
4.
Explain why the saving curve slopes upward in the saving-investment diagram.
A.Higher interest rates provide higher returns for savers and also a higher opportunity cost of current consumption.
B.Higher interest rates provide an incentive for individuals to consume more in the present and future.
C.Higher interest rates lead to increased government purchases.
D.Higher interest rates reduce the opportunity cost of future consumption activity.
Explain why the investment curve slopes downward in the saving-investment diagram.
A.Higher interest rates increase the user cost of capital thus reducing the desired capital stock.
B.Higher interest rates increase the gap between gross and net investment.
C.Higher interest rates reduce the productivity of capital thus reducing the desired capital stock.
D.Higher interest rates lead to an increase in the per-unit price of capital.
5.
Given the following:
Output (Y) : 2,000
Government Spending (G): 200
Desired Consumption (Cd): 1,800
Real interest rate: 3%
If the level of desired investment is equal to 200,
the real interest rate is likely to __________(increase, decrease or unchanged)
In: Economics
Discuss the hormonal and clinical changes seen during
a normal
menstrual cycle (30%). Choose 2 examples of clinical situations
where
the normal menstrual cycle does not occur. In both clinical
scenarios
chosen, state the hormonal pattern observed and provide an
explanation for each result observed (70%).(500words)
In: Biology