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alue 2.00 points E10-6 Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Asset, Hurdle Rate on Each [LO 10-4,
alue 2.00 points E10-6 Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Asset, Hurdle Rate on Each [LO 10-4, 10-5 Kaler Company has sales of S1,550,000, cost of gcods sold of $820,000, other operating expenses of s233,000, average invested assets or 55,100,000, and a hurdie rate or 12 percent Required 1. Determine Kaler's returm on investment (ROl), investment turnover, profit margin, and residual income. (Do not round your intermediate calculations. Enter your ROl and Profit Margin answer to the nearest whole percentage, i., 0.1234 should be entered as 12%). Round your investment Turnover answers to 4 decimal places.) Return on Investment Investment Tumover Profit Margin Residual Income 2. Several possible changes that Kaler could face in the upcoming year follow. Determine each scenario's impact on Kaler's ROI and residual income (Note Treat each scenano independently ) (Enter your ROI percentage answers to 2 decimal places. (Le., 0.1234 should be entered as 12.34% a. Company sales and cost of goods sold increase by 10 percent. Return on Investment Residual Income (Loss) b. Operating expenses increase by $90,000 Return on Investment Residual Income (Loss) c. Operating expenses decrease by 10 percent Return on Investment Residual Income (Lass) d. Average invested assets decrease by $455,000 Return on Investment Residual Income (Loss) e. Kaler changes its hurdle rate to 9 percent. Return on Investment Residual Income (Loss)
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