14 marks The Income Statement (using the Contribution Format) for Cawley Company for the last year is below: Unit otal $8,000,000 160.00 112.00 48.00 33.60 14.40 Sales Less Variable expenses Contribution Margin Less Fixed Expenses Net Operating Income 2,400,000 720 Bird had Average Operating Assets of $4,000,000 during the year Required: 1) Compute the following for Cawley Company:(6 marks) Margin (Operating Profit Margin); Answer Turnover (Asset Turnover); Answer:- Vh ROI (Return on Investment): Answer 2) For each of the following independent situations, using above numbers....6 marks) (a) Indicate whether the Margin (operating profit margin) will Increase, Decrease, or Remain Unchanged as a result of the events described; (No Calculation needed) (b) Indicate whether the Turnover (asset turnover) will Increase, Decrease, or Remain Unchanged as a result of the events described; (No Calculation needed) and (c) Compute the new ROI. Consider cach situation separately, starting in each case from the data used to compute the original ROI in (1) above. Note: For Margin and Turnover, it is no necessary to compute the new value, nly Assume each event below (i, ii,& ii) is Separate.* i) By use of Just-in-Time (JIT), Cawley is able to reduce the Average Operating Assets-(Inventory) by $800,000. (These new funds are used to pay off short- term creditors). Margin New ROI ii) Cawley increases wages by $64,000 in accordance with a new Union Agreement. Margin New RO RU ii) Cawley uses excess Cash to purchase $1,000,000 in Machinery and Equipment Sales remain unchanged. The new, more efficient Equipment reduces production costs by $40,000 per year Margin New RoI 3) Using the original information from part (1) and assuming that the required Rate of Return for Cawley is 16%, what is its Residual Income for last year? (2 mark)