If your formulas are correct, you should get the correct answers to the followin

Question

If your formulas are correct, you should get the correct answers to the following questions.

What is the ROI? (Leave no cells blank - be certain to enter "0" wherever required. Omit the "%" sign in your response.)

What is the residual income? (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)

A B C 1 Chapter 11: Applying Excel 2 3 Data 4 Sales $36,000,000    5 Net operating income $5,400,000    6 Average operating assets $18,000,000    7 Minumum required rate of return 27% 8

Explanation / Answer

margin = net operating income /sales = 5400000/36000000 = 15%

turnover = sales/average operating assests = 36000000 / 18000000 = 2

ROI = margin * turnover = 15% * 2 = 30%

residual incoime = Net operating income - required rate * operating assests

= 5400000 - 0.27 * 18000000 = 540000

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