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 $$1,550,000,$ cost of goods sold of $$820,000,$ other operating expenses of $$233,000,$ average invested

assets of $$5,100,000,$ and a hurdle rate of $12$ percent.

Required:

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.$)$

a$.$ Company sales and cost of goods sold increase by $10$ percent.

b$.$ Operating expenses increase by $$90,000.$

c$.$ Operating expenses decrease by $10$ percent.

d$.$ Average invested assets decrease by $$455,000.$

e$.$ Kaler changes its hurdle rate to $9$ percent.

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2A$

Req $2B$

Req $2C$

Req $2D$

Req $2E$

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

Note: Do not round your intermediate calculations. Enter your ROI and Profit Margin answers to $2$ decimal places $($i$.$e$.,0\mathrm{.}1234$

should be entered as $12\mathrm{.}34\%).$ Round your Investment Turnover answer to $4$ decimal places. Loss amount should be indicated

with a minus sign.Kaler Company has sales of $$1,550,000,$ cost of goods sold of $$820,000,$ other operating expenses of $$233,000,$ average invested assets of $$5,100,000,$ and a hurdle rate of $12$ percent.

Required:

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 $10$ percent.

Operating expenses increase by $$90,000.$

Operating expenses decrease by $10$ percent.

Average invested assets decrease by $$455,000.$

Kaler changes its hurdle rate to $9$ percent.