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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

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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 rate of 12 percent. Required: 1. Determine Solano's return on investment (ROI), investment turnover, profit margin, and residual income. (Do not round your intermediate calculations. Enter your ROl 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 Tumover Profit Margin Residual Income osS 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 scenano independently.) (Enter your ROI percentage answers to 2 decimal places ( e. 0.1234 should be entered as 12.34% a. Company sales and cost of goods sold increase by 30 percent. Return on Investment Residual Income (Loss) e. Solano changes its hurdle rate to 18 percent. Return on Investment 0 Residual Income (Loss)

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