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Managerial accounting practice problem.?


I am lost on trying to figure out this problem. Can somebody give the correct procedure to arrive at the answer?

Company is calculating its return on investment. Both sales and expenses cannot be changed, thus the operating income would remain at $ 52,564. The amount of total operating assets is $301,242.
What change in the amount of operating assets is required to achieve a ROI of 20 percent? (Do not use commas or dollar signs in your answer. Keep your answer a positive number.)

Correct Answer 38,422

General Feedback: In order to achieve your targeted ROI you have to change one or more factors. In this exercise you cannot change sales or expenses. So you are left with changing the amount of the investment in order to achieve a higher ROI.

I have figured out that the current ROI is 17.4 % (52,564 / 301242). Thanks in advance

I can work out the problem by guessing until I get close to the right answer but must be missing something. Can you explain it again to me. Sorry

You need to solve the following expression for X.

0.20 = 52564/X

hint multiply both sides by X

since this is a homework question take it to the homework section!!!!

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