Solano Company has sales of $$860,000,$ cost of goods sold of $$550,000,$ other operating expenses of $$50,000,$ average invested assets of $$2,500,000,$ and a hurdle rate of $12$ percent.

$12\mathrm{.}5$

points

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 $$13,000.$

c$.$ Operating expenses increase by $20$ percent.

d$.$ Average invested assets increase by $$480,000.$

e$.$ Solano changes its hurdle rate to $18$ percent.

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

Req $1$

Req $2A$

Req $2$B

Req $2$E

Several possible changes that Solano could face in the upcoming year follow. Deter ROI and residual income. $($Note: Treat each scenario independently.$)$ Solano chang Note: Loss amounts should be indicated with a minus sign. Enter your ROI percenti $0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.)$

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