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DATA INPUT
(All numbers in thousands)
Ending Balance 12/31/x1 25,200$
Increase since last year 5%
Minimum Return 15%
Sales Revenue 48,000$
Cost of Goods Sold 31,600$
Gross Margin 16,400$
Operating Expenses
Administrative 4,280$
Selling 7,200$ 11,480$
Income from operations before income taxes 4,920$
SOLUTION
1. Average investment in productive assets:
Balance on 12/31/x1 ##########
a.
ROI = Income from operations before Income taxes / average productive assets
b.
Income from operations before income taxes 4,920,000$
Less :Imputed interest charge
