Solano Company has sales of $880,000, cost of goods sold of $560,000, other operating expenses of $45,000, average invested assets of $2,550,000, and a hurdle rate of 12 percent.


Required:
1. Determine Solanos 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 to 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 Turnover
Profit Margin		%
Residual Income (Loss)

2. Several possible changes that Solano could face in the upcoming year follow. Determine each scenarios impact on Solanos 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)