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Question 4 Reporting for control CANCO Company has the following information for its 2020 fiscal period: Sales $1,500,000 Operating Income $45,000 Shareholders' Equity $200,000 Average
Question 4 Reporting for control
CANCO Company has the following information for its 2020 fiscal period:
Sales | $1,500,000 |
Operating Income | $45,000 |
Shareholders' Equity | $200,000 |
Average Operating Assets | $380,000 |
Minimum Required Rate of Return | 25% |
questions
- What is CANCOs residual income? Briefly explain your findings.
- What is CANCOs return on investment (ROI)? Briefly explain your findings. (4 marks)
- What factors can influence ROI to increase? (3 marks)
- How increasing sales without an increase in operating assets would impact ROI? (4 marks)
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