E10-7 (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 soles of $1,370,000, cost of goods sold of $775,000, other operating expenses of $188,000, average invested assets of $4,200,000, and a hurdle rate of 12 percent. Required: 1. Determine Kaler's return on investment (ROI), Investment turnover, profit margin, and residual income. 2. Several possible changes that Kaler could face in the upcoming year follow. Determine each scenario's impact on Koler'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 $81,000, c. Operating expenses decrease by 10 percent d. Average invested assets decrease by $365,000 e. Kaler changes is hurdle rate to 9 percent Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 26 Reg 2 Reg 20 Req 2 Determine Kaler's return on investment (ROI), investment turnover, profit margin, and residual income. (Do not round your Intermediate calculations, Enter your Roi and Profit Margin answers to 2 decimal places (1..., 0.1234 should be entered as 12.34%) Round your investment Turnover answer to 4 decimal places.) Return on investment Investment Turnover Pront Margin Residual income (L038) Req2A > Reg 1 Reg 2A Req 28 Reg 20 Reg 2 Reg 2D 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.) Company sales and cost of goods sold increase by 10 percent. (Enter your ROI percentage answer to 2 decimal places, (.e., 0.1234 should be entered as 12.34%.)) Return on investment Residual Income (Loss) Reg 1 Reg 2A Reg 28 Reg 20 Reg 2D Reg 2E 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 $81,000. (Enter your ROI percentage answer to 2 decimal places, (.e., 0.1234 should be entered as 12.34%.)) Return on Investment Residual Income (L03) + Reg 1 Reg 2A Reg 28 Reg 20 Reg 2D Reg 2E 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 10 percent. (Enter your ROI percentage answer to 2 decimal places, (l.e., 0.1234 should be entered as 12,34%)) Return on investment Renidos Income (Loss) Rent Reg 2A Reg 28 Reg 20 Reg 2D Reg 2 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 aspets decrease by $365,000. (Enter your ROI percentage answer to 2 decimal places, C., 0.1234 should be entered as 12.34%.)) Return on investment Residual income (Los) Reg 1 Red 2A Reg 26 Reg 20 Reg 20 Reg 2 Several possible changes that Kaler could face in the upcoming year foliow. 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. (Enter your ROI percentage answer to 2 decimal places. e., 0.1234 should be entered as 12.34.) Return on investment Residual income (LO)
