Solano Company has sales of $$540,000,$ cost of goods sold of $$390,000,$ other operating expenses of $$52,000,$ average invested assets of $$1,700,000,$ and a hurdle rate of $7$ percent.

Required:

Determine Solano's return on investment $($ROI$),$ investment turnover, profit margin, and residual income.

Several possible changes that Solano could face in the upcoming year follow. Determine each scenario's impact on Solano's ROI and residual income. $($Note: Treat each scenario independently.$)$

a$.$ Company sales and cost of goods sold increase by $30$ percent.

b$.$ Operating expenses decrease by $$11,500.$

c$.$ Operating expenses increase by $10$ percent.

d$.$ Average invested assets increase by $$320,000.$

e$.$ Solano changes its hurdle rate to $13$ percent.