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Solano Company has sales of $900,000, cost of goods sold of $570,000, other operating expenses of $46,000, average invested assets of $2,600,000, and a hurdle
Solano Company has sales of $900,000, cost of goods sold of $570,000, other operating expenses of $46,000, average invested assets of $2,600,000, and a hurdle rate of 12 percent. Required: 1. Determine Solano's return on investment (ROI), investment turnover, profit margin, and residual income. 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.) a. Company sales and cost of goods sold increase by 30 percent. b. Operating expenses decrease by $15,000. c. Operating expenses increase by 20 percent. d. Average invested assets increase by $500,000. e. Solano changes its hurdle rate to 18 percent. Complete this question by entering your answers in the tabs below. Determine Solano's return on investment (ROI), investment turnover, profit margin, and residual income. Note: Loss amounts should be indicated with a minus sign. 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. 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.) Company sales and cost of goods sold increase by 30 percent. Note: Loss amounts should be indicated with a minus sign. Enter your ROI percentage answer to 2 decimal places, (i.e., 0.1234 should be entered as 12.34%.) 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.) Operating expenses decrease by $15,000. Note: Loss amounts should be indicated with a minus sign. Enter your ROI percentage answer to 2 decimal places, (i.e., 0.1234 should be entered as 12.34%.) 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.) Operating expenses increase by 20 percent. Note: Loss amounts should be indicated with a minus sign. Enter your ROI percentage answer to 2 decimal places, (i.e., 0.1234 should be entered as 12.34%. 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.) Average invested assets increase by $500,000. Note: Loss amounts should be indicated with a minus sign. Enter your ROI percentage answer to 2 decimal places, (i.e., 0.1234 should be entered as 12.34%.) 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.) Solano changes its hurdle rate to 18 percent. Note: Loss amounts should be indicated with a minus sign. Enter your ROI percentage answer to 2 decimal places, (i.e., .1234 should be entered as 12.34%
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