Investors have set the following expectations for profitability and earnings:

Question

ROI first year must be at least 17%

Turnover in the first year is budgeted at DKK 3,400,000, oo excl. VAT and the total investment
Amounts to DKK 4.000.000, oo excl. VAT.

1.1 How much profit should be 1st degree years if the rates of return should be 17%.

During the first 5 years, the rates of return increase to at least 22%. This means that there must be improvements in both earnings as capital care.

1.2 Give 3 possible improvements that will affect earning capacity and thus the level of profits.

1.3 Give 3 possible improvements that will affect the alignment of capital and thus the asset turnover rate.