Question
Lambala Co. has an opportunity to invest $750,00 in a project that will yield 15% of Return on sales yearly. Lambala Co. has a 8%
Lambala Co. has an opportunity to invest $750,00 in a project that will yield 15% of Return on sales yearly. Lambala Co. has a 8% minimum acceptable rate of return. Additional information is as follows:
Sales............................................................................................................... $2,250,000
Cost of sales................................................................................................... 680,000
Operating expenses........................................................................................ 370,000
Non-Operating expenses................................................................................ 150,000
Tax rate . 35%
Operating earnings......................................................................... A
Turnover Rate ................................................................................................ B
Profit Margin.................................................................................................. C
Target Income .. .. D
Residual Income (RI) E
Return on Investment (ROI).... F
If operating Expenses decrease by 20% what is the Return on Investment.. G
If Sales increase by 25% what is the Return on Investment.. H
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