Solano Company has sales of $$800,000,$ cost of goods sold of $$520,000,$ other operating expenses of $$35,000,$ average invested assets of $$2,350,000,$ and a hurdle rate of $11$ 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 $40$ percent.

b$.$ Operating expenses decrease by $$10,000.$

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

d$.$ Average invested assets increase by $$450,000.$

e$.$ Solano changes its hurdle rate to $17$ percent.

Complete this question by entering your answers in the tabs below.

Req $2A$

Req $2$D

Req $2E$