Compute the roi that would be generated by the new service


Problem: The Consumer Appliance Division is one part of Rush Corporation. For the prior year, the Consumer Appliance Division reported income of $112,000 on an investment in operating assets of $800,000. The division expects this level of performance to continue for the current year. Senior management of Rush Corporation has asked the Consumer Appliance Division to consider adding a new service line that would result in the following additional revenues, costs, and assets: Operating Revenues $240,000 Operating Expenses 180,000 Operating Assets 500,000 Compute the ROI that would be generated by the new service line. The Consumer Appliance Division is one part of Rush Corporation. For the prior year, the Consumer Appliance Division reported income of $112,000 on an investment in operating assets of $800,000. The division expects this level of performance to continue for the current year. Senior management of Rush Corporation has asked the Consumer Appliance Division to consider adding a new service line that would result in the following additional revenues, costs, and assets: Operating Revenues $240,000 Operating Expenses 180,000 Operating Assets 500,000 Compute the ROI that would be generated by the new service line. 8.33% 12.00% 36.00% 48.00%

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Accounting Basics: Compute the roi that would be generated by the new service
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