Investors have set the following expectations for profitability and earnings:

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.

To calculate the profit required in the first year to achieve a 17% return on investment (ROI), you need to follow these steps:

Step 1: Calculate the ROI percentage as a decimal by dividing it by 100:
ROI = 17/100 = 0.17

Step 2: Calculate the required profit by multiplying the total investment (excluding VAT) by the ROI percentage:
Required Profit = Total Investment * ROI
Required Profit = DKK 4,000,000 * 0.17 = DKK 680,000

Therefore, the profit required in the first year to achieve a 17% ROI is DKK 680,000.

Now, let's move on to the second part of the question.

1.2 Three possible improvements that can affect earning capacity and thus the level of profits are:

1. Increase in sales volume: By increasing the number of units sold or the average selling price, the company can generate higher revenue and potentially increase profits.

2. Cost reduction: Implementing cost-saving measures such as optimizing the supply chain, negotiating better supplier contracts, or reducing overhead expenses can lead to higher profitability.

3. Product or service innovation: Introducing new or improved products or services that cater to customer needs and preferences can create a competitive advantage, attract more customers, and generate higher profits.

Now, let's move on to the next part of the question.

1.3 Three possible improvements that can affect the alignment of capital and thus the asset turnover rate are:

1. Inventory management: Efficient inventory management practices, such as minimizing holding costs, avoiding stockouts, and optimizing order quantities, can lead to higher asset turnover.

2. Asset utilization: Maximizing the utilization of assets, such as machinery, equipment, or vehicles, can increase the productivity of capital and improve the asset turnover ratio.

3. Working capital management: By effectively managing cash flows, accounts receivable, and accounts payable, a company can reduce the amount of tied-up capital and improve the efficiency of capital utilization.

Implementing these improvements can lead to a higher asset turnover rate, which in turn can contribute to achieving the desired ROI.