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Myrtle Company has sales of $166,000, cost of goods sold of $69,980, operating expenses of $17,500, average invested assets of $520,000, and a hurdle
Myrtle Company has sales of $166,000, cost of goods sold of $69,980, operating expenses of $17,500, average invested assets of $520,000, and a hurdle rate of 7.75 percent. Calculate Myrtle's return on investment and its residual income. (Enter your ROI answer as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Residual Income (Loss) answer to the nearest whole dollar.) % Return on Investment (ROI) Residual Income (Loss) The Western Division of Claremont Company had net operating income of $139,000 and average invested assets of $558,000. Claremont has a required rate of return of 12.50 percent. Western has an opportunity to increase operating income by $50,000 with a $92,000 increase in average invested assets. Compute Western Division's return on investment and residual income currently and if it undertakes the project. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%). Round your Residual Income (Loss) answers to the nearest whole dollar.) Current Proposed Project Return on Investment (ROI) % Residual Income (Loss) %
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