SOLVED NUMERICAL PROBLEMS
  1. How much the operating profit has to be raised in order to have a return on investment of 30%, with given sales for Rs 3,00,000 and an asset for Rs 2,00,000?

    Solution

    Return on investment = profit margin × asset turnover

    or 0.30 = x/3,00,000 × 3,00,000/2,00,000

    or 0.30 × 3,00,000 = x × 3,00,000/2,00,000

    or x = 90,000 × 2,00,000/3,00,000

    or x = 60,000

    The operating profit has to be raised to Rs 60,000 in order to get ROI of 30%.

     

  2. A firm takes up economy measures and is able to reduce the operating cost, and raises the operating profit from Rs 50,000 to Rs 60,000. The sales amount to Rs 3,00,000 and the assets are valued at Rs 2,50,000. Find out ROI (a) prior to economy measures, and (b) after the economy measures. ...

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