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

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Question

Accounting

Kaler Company has sales of $1,270,000, cost of goods sold of $750,000, other operating expenses of $163,000, average invested
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 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.)
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 1
Req 2E
Determine Kaler's return on investment (ROI), investment turnover, profit margin, and residual income. (Do not round your
intermediate calculations. Enter your ROI and Profit Margin answers to 2 decimal places (i.e.,0.1234 should be entered as
12.34%). Round your Investment Turnover answer to 4 decimal places.)
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