Question
Jordan Shoe Company provided the following information about the fiscal year ending December 31, 2022. Sales Revenue $1,200,000 Less, Variable expenses 480,000 Contribution Margin $
Jordan Shoe Company provided the following information about the fiscal year ending December 31, 2022.
Sales Revenue $1,200,000
Less, Variable expenses 480,000
Contribution Margin $ 720,000
Less, Fixed expenses 504,000
Operating Income _$216,000
On January 1, 2022, the company had $800,000 in operating assets and during the year the company purchased an additional $200,000 of operating assets.
Required:
A). Calculate the Margin and Turnover for the company for 2022.
B). Calculate the ROI using results from (A) above and using the alternative method.
C). If Jordan expects a minimum required rate of return of 15 percent, calculate the Residual Income.
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