Question
Question 4 (15 marks) Reporting for control HARD MIKE Company has the following information for its 2020 fiscal period: Sales $1,100,000 Operating Income $31,000 Shareholders'
Question 4 (15 marks) Reporting for control
HARD MIKE Company has the following information for its 2020 fiscal period:
| Sales | $1,100,000 |
| Operating Income | $31,000 |
| Shareholders' Equity | $180,000 |
| Average Operating Assets | $260,000 |
| Minimum Required Rate of Return | 16% |
Required:
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What is HARD MIKEs residual income?Briefly explain your findings. (4 marks)
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What is HARD MIKEs return on investment (ROI)?Briefly explain your findings. (4 marks)
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What factors can influence ROI to decrease? (3 marks)
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How decreasing operating expenses with no change in sales or operating assets would impact ROI? Briefly explain. (4 marks)
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Auditing And Assurance Services A Systematic Approach
Authors: William F. Messier
6th Edition
0073526908, 9780073526904
