Need formula and explanation 5 Data 6 Sales $25,000,000 7 Net operating income...
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Accounting
Need formula and explanation
5 Data 6 Sales $25,000,000 7 Net operating income $3,000,000 8 Average operating assets $10,000,000 9 Minimum required rate of return 25% 10 11 Enter a formula into each of the cells marked with a ? below 12 Review Problem: Return on Investment (ROI) and Residual Income 13 14 Compute the ROI 15 Margin 16 Turnover 17 ROI 18 19 Compute the residual income 20 Average operating assets 21 Net operating income 22 Minimum required return 23 Residual income 26 27 Notes: 29 1) Calculate ROI based on the Data above first. What is it? 33 2) Change the Average Operating Assets to $8,000,000 and comment 34 below on the change in ROI with the lower operating assets. 35 Any change in Residual Income? 37 38 3) Now change Sales to $15,000,000 with other Data presented in Note 1 as shown above. 39 You may copy the formula and show the results. 40 Any change in Residual Income? 41 42
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Need formula and explanation 