solving for the licensing fees as a percentage of sales revenue 1. return on invested capital is

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solving for the licensing fees as a percentage of sales revenue

1. return on invested capital is equal to profit/ assets=

2. The Profit made purely because of licenses technology

3. The margin of profit that should rightfully go to the licensor of the profit made purely because of licenses fees is 55% so

4. Sales/ assets ratio=

5. Licensing fees as a percentage of sales revenue will then be equal to the answer of 3 above divided by the answer of 4 above =

So the answer is 9% of sales revenue should be the licensing fees

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Mar 03, 2024 01:28 PM

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solving for the licensing fees as a percentage of sales revenue 1. return on invested capital is

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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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