Ramsey Automotive Ltd

question 34

Essay

Ramsey Automotive Ltd. had sales of $3,500,000 and net operating income of $900,000 last year. Operating assets last year averaged $1,500,000. The company's manager is considering the purchase of a new machine which is expected to increase average operating assets by 20%.
Required: Calculate the company's new ROI if the new machine is purchased.

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Definitions:

Product Service

A combination offering that includes both tangible products and intangible services, designed to meet specific customer needs.

Communication Standard

Established protocols or guidelines that allow different communication systems to work together effectively, ensuring compatibility and interoperability.

Supply Chain

Involves all the steps involved in getting a product from a raw material to the customer, including production, transportation, and distribution.

Customer-Facing

Activities, roles, or functions in a business that directly interact with the customers, such as sales and customer service.