Carol Janicek, a division manager of South wood Corp., provides you with the following information regarding her division:
|
Beginning of the year assets |
$150,000 |
|
End of the year assets |
$194,000 |
|
Revenues for year |
$150,500 |
|
Expenses for year |
$122,500 |
Variable expenses, 30 percent of total revenues; remaining expenses, fixed.
a. Compute the profit margin for the year.
b. Compute average assets for the year.
c. Compute asset turnover for the year.
d. Compute return on investment for the year.
e. If Ms. Janicek could increase revenues next year by 25 percent with an increase
in advertising of $15,000 and no changes in asset investment, what
would be her new rate of return?