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The following information provided by Silver Doors Inc on Dec.31 2019 . Sales 2,400,000 Operating expenses 1,600,000 Average Operating assets 4,000,000 Required Rate of Return

The following information provided by Silver Doors Inc on Dec.31 2019.

Sales

2,400,000

Operating expenses

1,600,000

Average Operating assets

4,000,000

Required Rate of Return

24%

Instructions:

  1. Calculate Margin, Turnover and Return on Investment.
  2. Calculate Residual Income.
  3. Silver Doors Inc. planning to increase Average Operating Assets $2,000,000 during 2020. The estimations of managerial accountant that this investment will increase Net Sales by 60% and Operating Expenses 30%. Do you recommend this investment? Show your calculations.

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