E$10-7($Algo$)$ Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Assets, Hurdle Rate on Each $[$LO $10-4,10-5]$

Kaler Company has sales of $$1,270,000,$ cost of goods sold of $$750,000,$ other operating expenses of $$163,000,$ average invested assets of $$3,700,000,$ and a hurdle rate of $12$ percent.

Required: $1$

Determine Kaler$$s return on investment $($ROI$),$ investment turnover, profit margin, and residual income.

Several possible changes Kaler could face in the upcoming year follow. Determine each scenario$$s impact on Kaler$$s ROI and residual income. $($Note: Treat each scenario independently.$)$

Company sales and cost of goods sold increase by $15$ percent.

Operating expenses increase by $$76,000.$

Operating expenses decrease by $20$ percent.

Average invested assets decrease by $$315,000.$

Kaler changes its hurdle rate to $9$ percent. Return on Investment $\%$

Investment Turnover

Profit Margin $\%$

Residual Income $($Loss$)$

Required: $2$A Several possible changes Kaler could face in the upcoming year follow. Determine each scenario$$s impact on Kaler$$s ROI and residual income. $($Note: Treat each scenario independently.$)$ Company sales and cost of goods sold increase by $15$ percent.

Note: Enter your ROI percentage answer to $2$ decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.).$ Loss amount should be indicated with a minus sign.

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Return on Investment $\%$

Residual Income $($Loss$)$

Required $2$ b 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 scenario independently.$)$ Operating expenses increase by $$76,000.$

Note: Enter your ROI percentage answer to $2$ decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.).$ Loss amount should be indicated with a minus sign.

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Return on Investment $\%$

Residual Income $($Loss$)$

Required: $2$C 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 scenario independently.$)$ Operating expenses decrease by $20$ percent.

Note: Enter your ROI percentage answer to $2$ decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.).$ Loss amount should be indicated with a minus sign.

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Return on Investment $\%$

Residual Income $($Loss$)$

Required: $2$ D 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 scenario independently.$)$ Average invested assets decrease by $$315,000.$

Note: Enter your ROI percentage answer to $2$ decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.).$ Loss amount should be indicated with a minus sign.

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Return on Investment $\%$

Residual Income $($Loss$)$

Required: $2$ E 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 scenario independently.$)$ Kaler changes its hurdle rate to $9$ percent.

Note: Enter your ROI percentage answer to $2$ decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.)$

Return on Investment $\%$

Residual Income $($Loss$)$