I need Questions: 5,6 and 7 answered:

The contribution format income statement for Huerra Company for last year is given below:

	Total		Unit
Sales	$	1,008,000	$	50.40
Variable expenses		604,800		30.24
Contribution margin		403,200		20.16
Fixed expenses		323,200		16.16
Net operating income		80,000		4.00
Income taxes @ 40%		32,000		1.60
Net income	$	48,000	$	2.40

The company had average operating assets of $499,000 during the year.

Required:

1. Compute the companys return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your intermediate calculations and final answer to 2 decimal places.)

Margin	7.94	%
Turnover	2.02
ROI	16.03	%

For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above.

5. Sales are increased by 25%; operating assets remain unchanged. (Round your answers to 2 decimal places.)

			Effect
Margin		%
Turnover
ROI		%

6. Obsolete inventory carried on the books at a cost of $18,000 is scrapped and written off as a loss. (Round your answers to 2 decimal places.)

			Effect
Margin		%
Turnover
ROI		%

7. The company uses $178,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your answers to 2 decimal places.)

			Effect
Margin		%
Turnover
ROI		%