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Rundle Corporation's balance sheet indicates that the company has $620,000 invested in operating assets. During 2018, Rundle earned operating income of $76,880 on $1,240,000 of
Rundle Corporation's balance sheet indicates that the company has $620,000 invested in operating assets. During 2018, Rundle earned operating income of $76,880 on $1,240,000 of sales. Required a. Compute Rundle's profit margin for 2018. b. Compute Rundle's turnover for 2018. c. Compute Rundle's return on investment for 2018. d. Recompute Rundle's ROl under each of the following independent assumptions: (1) Sales increase from $1,240,000 to $1,488,000, thereby resulting in an increase in operating income from $76,880 to $81,840. (2) Sales remain constant, but Rundle reduces expenses, resulting in an increase in operating income from $76,880 to $79,360 (3) Rundle is able to reduce its invested capital from $620,000 to $496,000 without affecting operating income
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