Tillamoke Company Produces Gourmet Cheejes

question 6

Essay

Tillamoke Company produces gourmet cheejes.Selected results from the most current year were as follows:


Production manager Melinda Penland is investing the purchase of a new fermenting station that will increase the plant's production capacity.Based on her research,Melinda thinks the station would cost $140,000 and would increase sales revenue by $200,000 and operating profit by $32,000.
Required
a.Calculate Tillamoke's current margin,asset turnover,and return on investment.
b.Calculate Tillamoke's margin,asset turnover,and return on investment assuming the company purchases the new fermenting station.
c.Assume Melinda Penland's annual bonus is based on the company's return on investment.Will Melinda support the purchase of the new fermenting station? Why or why not?

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Definitions:

Small Request

A technique in persuasion and compliance that involves asking for a minor initial request in hopes of influencing agreement to a larger request.

Stroop Effect

A phenomenon demonstrating the delay in the reaction time of a task when the color of the word does not match the name of the word.

Mentally Ill

A term used to describe individuals who are experiencing psychological disorders or conditions that affect their thinking, feeling, behavior, or mood.

Representativeness Heuristic

A cognitive shortcut that involves making judgments based on how much one event resembles another.