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E10-5 Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Assets, Hurdle Rate on Each [LO 10-4, 10-5] Solano Company
E10-5 Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Assets, Hurdle Rate on Each [LO 10-4, 10-5] Solano Company has sales of $900,000, cost of goods sold of $570,000, other operating expenses of $46,000, average invested assets of $2,600,000, and a hurdle rate of 12 percent. Required: 1. Determine Solano's return on investment (ROI), investment turnover, profit margin, and residual income. (Do mediate calculations. Enter your ROI and Profit Margin percentage answer to the nearest 2 decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Investment Turnover answer to 4 decimal places.) Return on Investment 10.921% Investment Turnover Profit Margin Residual Income (Loss) d. Average invested assets increase by $500,000. Return on Investment Residual Income (Loss)
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