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Manyops, Inc., is a manufacturing firm that has experienced strong compensations business. Management is considering joining the trend to the service economy by eliminating its

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Manyops, Inc., is a manufacturing firm that has experienced strong compensations business. Management is considering joining the trend to the "service economy" by eliminating its manufacturing operations and concentration on providing specialized maintenance service to other manufactures. Management of Manyops, Inc, has had a target ROI of 17% on an asset base that has averaged $7 million. To achieve this ROI, average total asset turnover of 2 was required. If the company shifts its operations from manufacturing to providing services, it is estimated that average will decrease to $4 million. Required: a. Calculate net income, margin and sales required for Manyops, Inc., to achieve its largest ROI as a manufacturing firm. (Enter your "Sales" and "Net income" answers in million (i.e., 10,000,000 should be entered as 10). Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Assume that the average margin of maintenance service is 2.5%, and that the average ROI for such firms is also 17%. Calculate the net income, sales, total asset turnover that Manyopos, Inc., will have if the change to service is made and the firm is able to earn an average margin and 17% ROI (Enter your "Sales" and "Net income" answers in million (i.e., 10,000,000 should be entered as 10). Do not round intermediate calculations. Round your answers to 2 decimal places.)

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