ACCT 349 help A Guide to career/Snaptutorial ACCT 349 help A Guide to career/Snaptutorial | Page 18

1.Roma Bottling Co. has an investment of $3,000,000, an income-to-
revenues ratio of 4%, and an ROI of 12%. Its revenues are:
Income = 12% × $3,000,000 = $360,000
Revenues = $360,000 ÷ 0.04 = $9,000,000
a.$360,000
b.$9,000,000
c.$1,440,000
d.$12,000,000
2.Using the information in question 1, the revenues-to-investment
ratio is:
$9,000,000 ÷ $3,000,000 = 3 times
a.5 times
b.4 times
c.3 times
d.2 times
3.(CMA adapted) A company`s ROI increases if:
To answer this question, use assumed amounts. Suppose the present
ROI is 20% as follows:
Income x Revenues = ROI
Revenues Investment
$100,000 - $90,000 x $100,000 = 20%
$100,000 $50,000
a.Revenues increase by the same dollar amount that costs and total
assets increase
b.Revenues remain the same, and costs are reduced by the same dollar
amount that total assets increase
c.Revenues and costs increase by the same dollar amount that costs
increase
d.Revenues and costs increase by the same percentage that total assets
increase
e.None of the above
4.For the fiscal year just ended, Fletcher Inc. has an RI of $180,000
and operating income of $500,000. If the required rate of return is
16%, the amount of investment is:
Imputed interest cost = $500,000 − $180,000 = $320,000
Investment = $320,000 ÷ 0.16 = $2,000,000