Sorrento Corporation's balance sheet indicates that the company has $500,000 invested in operating assets. During year 2, Sorrento earned operating income of $50,000 on $1,000,000 of sales.

Hint: C. 10.00%

D. (3) 12.50%

please answer Problem 9-20A A-D 1-3

+ a. Describe the characteristics that differentime a cost center. a profit center, and an investment center from each other. b. Would the manager of the computer department be likely to conduct the operations of the department differently if the department were classified as a profli center of an investment center rather than as a cost center? Explain. LO 9-2 Xcel CHECK FIGURES c 10.00% (5) 12.50% Problem 9-20A Return on investareas Sorrento Corporation's balance sheet indicates that the company has $500.090 invested in operating assets. During Year 2. Sorrento carried operating income of $50,000 on $1,000.000 of sales. Required i Compute Sorrento's profit margin for Year 2. b. Compute Sorrento's turnover for Year 2. c. Compute Sorrento's return on investment for Year 2. d Eccompute Sorrento's ROI under each of the following independent avyamptions (1) Sales increase from $1.000,000 to $1.200,000. whereby resulting in an increase in operating income from $90.000 10 $56.000. (21 Sales remain conMant, but Sorrento reduces expenses, resulting in an increase in operating income from $:0,000 to $52,000. Somento is able to reduce its invested capital from $500,000 to $400.090 without affecting operating income. LO 9-2, 9-3 A