Question:
1. Snickers Company has two investment centers and has developed the following information:
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Department A
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Department B
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Net operating income
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$120,000
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?
|
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Average operating assets
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?
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$400,000
|
|
Sales
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800,000
|
250,000
|
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ROI
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10%
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12%
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Required:
a) What was the amount of Department A's average operating assets?
b) What was the amount of Department B's net operating income?
c) If Department B is able to reduce its operating assets by $100,000, what would be Department B's new ROI?
d) If Department A is able to increase its net operating income by $60,000 by reducing expenses, what would be Department A's new ROI?