Solano Company has sales of $$580,000,$ cost of goods sold of $$410,000,$ other operating expenses of $$54,000,$ average invested

assets of $$1,800,000,$ and a hurdle rate of $9$ 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 $$13,500.$

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

d$.$ Average invested assets increase by $$340,000.$

e$.$ Solano changes its hurdle rate to $15$ percent.