Impact on Expected Optimal Amount Level)of Current Assets Return on Investment s Net Profit Policy A Total Assets Policy B Let Current Assets s Policy C (Cash Rec +Inv) Return on Investment s Current Assets Net Profit Current Fixed Assets 25,000 50,000 OUTPUT(units) 8-78-7 Impact on Expected Profitability Return on Investment = Net Profit Total Assets Let Current Assets = (Cash + Rec. + Inv.) Return on Investment = Net Profit Current + Fixed Assets Optimal Amount (Level) of Current Assets 0 25,000 50,000 OUTPUT (units) ASSET LEVEL ($) Current Assets Policy C Policy A Policy B