Essay
Last year Reynolds Ltd.reported the following results:
Required:
a.Using the DuPont method, calculate the company's return on investment for the year just ended.
b.Assuming the company's sales, operating expenses, and assets remain the same as last year, by how much would the gross margin percentage have to increase to achieve a 20% return on investment?
c.Assume the company sets a minimum required return of 13%, what would the residual income be?
Correct Answer:
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a.ROI = Income/Sales ∗ Sales/A...View Answer
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