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Ruhl Company has the following information available for the last year: Sales Revenue Cost of Goods Sold and Operating Expenses Net Operating Income Average Invested
Ruhl Company has the following information available for the last year: Sales Revenue Cost of Goods Sold and Operating Expenses Net Operating Income Average Invested Assets Hurdle Rate $1,200,000 900,000 300,000 1,200,000 6% 1. Calculate return on investment (ROI) and residual income for the last year (1 point). ROI = Residual Income = 2. Re-calculate ROI and residual income for each independent situation that follows: a) If net operating income increases by 10% (1 point). New net operating income = ROI = Residual Income = (keep two decimals) b) If the company invests $250,000 more assets (the new average invested assets now increases to $1,450,000), and generates $100,000 more net operating income (2 points). New net operating income = New average invested assets = 1,200,000 + 250,000 = $1,450,000 ROI = (keep two decimals) Residual Income =
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