Myler International is considering a significant expansion to its product line. The sales force is excited about the opportunities that the new products will bring. The new products are a significant step up in quality above the company€™s current offerings, but offer a complementary fit to its existing product line. Frank Peralta, senior production department manager, is very excited about the high-tech new equipment that will have to be acquired to produce the new products. Carol Herbert, the company€™s CFO, has provided the following projections based on results with and without the new products.

Instructions
(a) Compute the company€™s return on assets ratio, profit margin ratio, and asset turnover ratio, both with and without the new product line.
(b) Discuss the implications that your findings in part (a) have for the company€™sdecision.

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Without New Products $10,000,000 Sales Net income Average total assets With New Products $18,000,000 $1,350,000 $15,000,000 $600,000 $5,000,000