Joseph, a buyer at MacTaggart & Smith Inc., is recommending an outsourcing option to company management. As part of his presentation, Joseph wants to demonstrate the powerful effects of lowering company costs through outsourcing as opposed to alternatives, such as increasing sales. Joseph obtains the following information from the companys financial reports.

Sales:	$650,000
COGS:	$500,000
Assets:	$900,000
Net profits (before tax and interest):	$ 45,000

Compute the following metrics on the purchasing multiplier (PM), the purchasing leverage effect (PLE), and the return on assets (ROA) effect. Complete the table. Important: Round your answers to two decimal places (Enter as ##.00 or #.00)

What increase in the volume of sales would have the same effect as a $1.00 decrease in purchase cost? (PM) (Enter as #.00)	$
Assume that a reduction of purchase costs by approximately 4% increases profits by $22,000. What is the profit leverage effect in this case? (Enter as ##.00)	%
Assume that the reduction in purchase costs also leads to a lower inventory valuation and thus decreases the firms assets by $13,000 to $887,000.
What is the ROA before the reduction in purchase costs? (Enter as #.00)	%
What is the ROA after the reduction in purchase costs? (Enter as #.00)	%