E$10-7($Algo$)$ Calculating Return on Investment, Residual Income, Determining Effect of Changes in

Sales, Expenses, Invested Assets, Hurdle Rate on Each $[$LO $10-4,10-5]$

Kaler Company has sales of $$1,270,000,$ cost of goods sold of $$750,000,$ other operating expenses of $$163,000,$ average investec

assets of $$3,700,000,$ and a hurdle rate of $12$ percent.

Required:

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

Several possible changes Kaler could face in the upcoming year follow. Determine each scenario's impact on Kaler's ROI and

residual income. $($Note: Treat each scenario independently.$)$

a$.$ Company sales and cost of goods sold increase by $15$ percent.

b$.$ Operating expenses increase by $$76,000.$

c$.$ Operating expenses decrease by $20$ percent.

d$.$ Average invested assets decrease by $$315,000.$

e$.$ Kaler changes its hurdle rate to $9$ percent.

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

Req $2B$

Req $2$C

Several possible changes that Kaler could face in the upcoming year follow. Determine each scenario's impact on Kaler's ROI

and residual income. $($Note: Treat each scenario independently.$)$ Average invested assets decrease by $$315,000.$

Note: Enter your ROI percentage answer to $2$ decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.).$ Loss amount

should be indicated with a minus sign.