net operating income = sales - cost of goods sold - other operating expenses
= $1210000 - $735000 - $148000 = $327000
(1)
return on investment = net operating income/average invested assets
= $327000/$3400000
= 9.62%
investment turnover = sales/average invested assets
= $1210000/$3400000
= 0.3559 times
profit margin = net operating income/sales
= $327000/$1210000
= 27.02%
Residual income = net operating income - (average invested assets x hurdle rate)
= $327000 - ($3400000 x 12%)
= -$81000
(2)
(a)
net operating income = ($1210000 x 115%) - ($735000 x 115%) - 148000 = $398250
return on investment = net operating income/average invested assets
= $398250/$3400000
= 11.71%
Residual income = net operating income - (average invested assets x hurdle rate)
= $398250 - ($3400000 x 12%)
= -$9750
Kaler Company has sales of $1,210,000, cost of goods sold of $735,000, other operating expenses of...
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req. 2b only
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please answer 2B and 2C
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Solano Company has sales of $760,000, cost of goods sold of $500,000, other operating expenses of $40,000, average invested assets of $2,250,000, and a hurdle rate of 11 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 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.)...
Solano Company has sales of $740,000, cost of goods sold of $490,000, other operating expenses of $46,000, average invested assets of $2,200,000, and a hurdle rate of 10 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...
Solano Company has sales of $740,000, cost of goods sold of $490,000, other operating expenses of $46,000, average invested assets of $2,200,000, and a hurdle rate of 10 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...
8
please show all work as necessary
this is for part A, B, C, D, and E for this question.
Solano Company has sales of $740,000, cost of goods sold of $490,000, other operating expenses of $46,000, average invested assets of $2,200,000, and a hurdle rate of 10 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...
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