E$10-6($Algo$)$ Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Assets, Hurdle Rate on Each $[$LO $10-4,10-5]$

Solano Company has sales of $$880,000,$ cost of goods sold of $$560,000,$ other operating expenses of $$45,000,$ average invested assets of $$2,550,000,$ and a hurdle rate of $12$ percent.

Required:

Determine Solano's 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 scenario's impact on Solano's ROI and residual income. $($Note: Treat each scenario independently.$)$

a$.$ Company sales and cost of goods sold increase by $40$ percent.

b$.$ Operating expenses decrease by $$14,000.$

c$.$ Operating expenses increase by $10$ percent.

d$.$ Average invested assets increase by $$490,000.$

e$.$ Solano changes its hurdle rate to $18$ percent.

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2A$

Req $2B$

Req $2$D

Req $2E$

Determine Solano's return on investment $($ROI$),$ investment turnover, profit margin, and residual income.

Note: Loss amounts should be indicated with a minus sign. Do not round your intermediate calculations. Enter your ROI and Profit Margin percentage answer to the nearest $2$ decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%).$ Round your Investment Turnover answer to $4$ decimal places.

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