Waldon Corporation’s shows that the company has $600,000 invested in operating assets. During 2014, Waldon earned $120,000 on $960,000 of sales. The company’s desired return on investment (ROI) is 12 percent.
Required
a. Construct a spreadsheet to calculate ROI and residual income using these data. Build the spreadsheet using formulas so that the spreadsheet could be used as a template for any ROI or residual income problem. The following screen capture shows how to construct the template.
Spreadsheet Tips
(1) The cells below row 12 that show numbers should all be based on formulas. This allows the results to be automatically recalculated based on changes in the data in rows 3 to 6.
(2) The parentheses in columns F and J have been entered as text in columns that have a column width of 1.
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