Last Year Reynolds Ltd.reported the Following Results

question 22

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?

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Definitions:

Crystallized Intelligence

This refers to the accumulation of knowledge, facts, and skills that one acquires through education and experience.

Fluid Intelligence

The aspect of intelligence involving the ability to reason abstractly, think logically, and solve problems in novel situations, independent of acquired knowledge.

"g" Factor

A term in psychology that refers to the general intelligence factor, believed to represent the common skills and abilities that underlie all intelligent behavior.

Correlate Poorly

Describes a weak or nonexistent relationship between two variables or factors.