Return on investment Albano Corporation’s balance sheet indicates that the company has $400,000 invested in operating assets. During 2006, Albano earned operating income of $60,000 on $800,000 of sales.

Required

a. Compute Albano’s margin for 2006.

b. Compute Albano’s turnover for 2006.

c. Compute Albano’s return on investment for 2006.

d. Recompute Albano’s ROI under each of the following independent assumptions.

(1) Sales increase from $800,000 to $1,000,000, thereby resulting in an increase in operating income from $60,000 to $80,000.

(2) Sales remain constant, but Albano reduces expenses, resulting in an increase in operating income from $60,000 to $64,000.

(3) Albano is able to reduce its invested capital from $400,000 to $320,000 without affecting operating income.