Mindspin Labs Incorporated is a manufacturing firm that has experienced strong competition in its traditional business. Management is

considering joining the trend to the "service economy" by eliminating its manufacturing operations and concentrating on providing

specialized maintenance services to other manufacturers. Management of Mindspin Labs has had a target ROI of $18\%$ on an asset base

that has averaged $$6$ million. To achieve this ROI as a manufacturing company, average total asset turnover of $2$ was required. If the

company shifts its operations from manufacturing to providing maintenance services, it is estimated that average total assets will

decrease to $$3$ million.

Required:

a$.$ Calculate net income, margin, and sales required for Mindspin Labs to achieve its target ROI as a manufacturing firm.

b$.$ Assume that the average margin of maintenance service firms is $2\mathrm{.}50\%,$ and that the average ROI for such firms is also $17\%.$

Calculate the net income, sales, and total asset turnover that Mindspin Labs will have if the change to services is made and the firm

is able to earn an average margin and achieve an ROI of $17\%.$

Complete this question by entering your answers in the tabs below.

Required $A$

Assume that the average margin of maintenance service firms is $2\mathrm{.}50\%,$ and that the average ROI for such firms is also $17\%.$

Calculate the net income, sales, and total asset turnover that Mindspin Labs will have if the change to services is made and

the firm is able to earn an average margin and achieve an ROI of $17\%.$

Note: Enter your "Sales" and "Net income" answers in millions $($i$.$e$.,10,000,000$ should be entered as $10).$ Do not round

intermediate calculations. Round your answers to $2$ decimal places.