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Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle
Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle rate of 8 percent Required: Determine Solano's return on investment (ROI), investment turnover, profit margin, and residual income. (Do not round your intermediate calculations. Enter your ROI and Profit Margin percentage answer o the nearest 2 decimal places, (i.e., 0.1234 should be entered as 12.34% ). Round your Investment Turnover answer to 4 decimal places.) Return on Investment % Investment Tunover Profit Margin Residual Income (Loss) 2. 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.) (Enter your ROI percentage answers to 2 decimal places, (i.e., 0.1234 should be entered as 12.34%.) a. Company sales and cost of goods sold increase by 40 percent. Return on Investment Residual Income (Loss) b. Operating expenses decrease by $10,500. Return on Investment % Residual Income (Loss)
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