1. Compute the company's return on investment () for the period using the formula stated in terms of margin and turnover For each of the following questions, indicate whether the margin and turnover increase decrease unchanged as a result of the events described, and then compute the new figureConsider each question separately, starting each case from the data used to compute the original above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $91,000. (The released funds are used to pay off short -term creditors.) 3. The company achieves a cost savings of $7,000 per year by using less costly materials 4. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $124,000. Interest on the bonds is $13,000 per yearSales remain unchanged. The new, more efficient equipment reduces production costs by \$8,000 per year. 5. As a result of a more intense effort by salespeople, sales are increased by 10%; operating assets remain unchanged. 6 the beginning of the year obsolete inventory carried on the books at a cost of $20,000 is scrapped and written off as a loss 7 the beginning of the year, the company uses $178,000 of cash (received on accounts recelvable) to repurchase and retire some of Vis stock

The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 996, 900 $ 49 . 80 Variable expenses 597, 600 29 . 88 Contribution margin 398, 400 19 .92 Fixed expenses 320.400 16. 02 Net operating income 78. 000 3.90 Income taxes @ 40% 31 , 200 1. 56 Net income S 46, 800 $ 2.34 The company had average operating assets of $508,000 during the year