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CANCO Company has the following information for its 2020 fiscal period: Sales $1,500,000 Operating Income $45,000 Shareholders' Equity $200,000 Average Operating Assets $380,000 Minimum Required
CANCO Company has the following information for its 2020 fiscal period: Sales $1,500,000 Operating Income $45,000 Shareholders' Equity $200,000 Average Operating Assets $380,000 Minimum Required Rate of Return 25% Required: a. What is CANCO's residual income? Briefly explain your findings. (4 marks) b. What is CANCO's return on investment (ROI)? Briefly explain your findings. (4 marks) c. What factors can influence ROI to increase? (3 marks) d. How increasing sales without an increase in operating assets would impact ROI? (4 marks)
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