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Data Sales $25,000,000 Net operating income $3,000,000 Average operating assets $10,000,000 Minimum required rate of return 25% Enter a formula into each of the cells
Data | ||||||
Sales | $25,000,000 | |||||
Net operating income | $3,000,000 | |||||
Average operating assets | $10,000,000 | |||||
Minimum required rate of return | 25% | |||||
Enter a formula into each of the cells marked with a ? below | ||||||
Review Problem: Return on Investment (ROI) and Residual Income | ||||||
Compute the ROI | ||||||
Margin | ? | |||||
Turnover | ? | |||||
ROI | ? | |||||
Notes: | ||||||
1) Calculate ROI based on the Data above first. | ||||||
2) Change the Average operating assets to $8,000,000 and comment | ||||||
below on the change in ROI with the lower operating assets. | ||||||
3) Now change Sales to $15,000,000 with other Data presented in Note 1 above as shown. |
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