Question - Hardcastle Ltd. had sales of $3 000 000 and net operating income of $900 000. Operating assets during the year averaged $1 500 000. The manager of Hardcastle is considering the purchase of a new machine which is expected to increase average operating assets by 5 per cent.
If the new machine is purchased, the company's new return on investment (ROI) would be:
196.9 per cent
57.1 per cent
190.5 per cent
50.8 per cent