With annual sales of $4,800,000 and operating assets of $3,200,000, Nolan Company achieved a 10 percent ROI.

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a. If Nolan reduces expenses by $80,000 and sales remain unchanged, what ROI will result?

b. If Nolan cannot change either sales or expenses, what change in the investment base is required to achieve the same result you calculated for Requirement a?

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Fundamental Managerial Accounting Concepts

ISBN: 978-0078110894

6th Edition

Authors: Edmonds, Tsay, olds

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Question Posted: Dec 07, 2011 05:22 AM

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With annual sales of $4,800,000 and operating assets of $3,200,000, Nolan Company achieved a 10 percent ROI.

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Fundamental Managerial Accounting Concepts

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