Snickers Company has two investment centers and has developed the following information:
|
Department A |
Department B |
|
|
Net operating income |
$120,000 |
? |
|
Average operating assets |
? |
$400,000 |
|
Sales |
800,000 |
250,000 |
|
ROI |
10% |
12% |
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?