Solano Company has sales of $ cost of goods sold of $ other operating expenses of $ average invested assets of $ and a hurdle rate of percent.
Required:
Determine Solanos return on investment ROI investment turnover, profit margin, and residual income.
Several possible changes that Solano could face in the upcoming year follow. Determine each scenarios impact on Solanos ROI and residual income. Note: Treat each scenario independently.
Company sales and cost of goods sold increase by percent.
Operating expenses decrease by $
Operating expenses increase by percent.
Average invested assets increase by $
Solano changes its hurdle rate to percent.
