Munoz Corporations balance sheet indicates that the company has $600,000 invested in operating assets. During 2018, Munoz earned operating income of $72,000 on $1,200,000 of sales.

Required

1. Compute Munozs profit margin for 2018.

2. Compute Munozs turnover for 2018.

3. Compute Munozs return on investment for 2018.

4. Recompute Munozs ROI under each of the following independent assumptions: (1) Sales increase from $1,200,000 to $1,440,000, thereby resulting in an increase in operating income from $72,000 to $80,640. (2) Sales remain constant, but Munoz reduces expenses, resulting in an increase in operating income from $72,000 to $74,400. (3) Munoz is able to reduce its invested capital from $600,000 to $480,000 without affecting operating income.

Munoz Corporations balance sheet indicates that the company has $600,000 invested in operating assets. During 2018, Munoz earned operating income of $72,000 on $1,200,000 of sales.

a.	Profit margin		%
b.	Turnover		times
c.	Return on investment		%

• Return on Investment
  (1)		%
  (2)		%
  (3)		%