Chap 15 Probs 22 & 23 Help Save & Exit Submit Saved F11 0 exit lull screen Check

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Chap 15 Probs 22 & 23 Help Save & Exit Submit Saved F11 0 exit lull screen Check my work Rundle Corporation's balance sheet indicates that the company has $620,000 invested in operating assets. During 2018, Rundle earned operating income of $76,880 on $1,240,000 of sales. Required 10 points a. Compute Rundle's profit margin for 2018 b. Compute Rundle's turnover for 2018 c. Compute Rundle's return on investment for 2018 d. Recompute Rundle's ROl under each of the following independent assumptions: eBoak References (1) Sales increase from $1,240,000 to $1,488,000, thereby resulting in an increase in operating income from $76,880 to $81,840. (2) Sales remain constant, but Rundle reduces expenses, resulting in an increase in operating income from $76,880 to $79,360 (3) Rundle is able to reduce its invested capital from $620,000 to $496,000 without affecting operating income Complete this question by entering your answers in the tabs below Req A toC Req D Compute Rundle's profit margin, turnover and return on investment for 2018. (Round "Profit margin" and "Return on investment" to 1 decimal place.) a. Profit margin Prev 1012 Next > Hill

Explanation / Answer

a. Profit margin = operating income/sales = 76,880/1,240,000 = 6.2%

b. Turnover for 2018 = sales/assets = 1,240,000/620,000 = 2.0 times

c. Return on investment = operating income/assets = 76,880/620,000 = 12.4%

d. 1. ROI = 81,840/620,000 = 13.20%

d2. ROI = 79,360/620,000 = 12.80%

d3: ROI = 76,880/496,000 = 15.50%

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