Nike, Inc. Income Statement for the Year Ended May 31, Year 19

• Sales revenue: $6,000,000
• Cost of goods sold: $4,000,000
• Gross margin: $2,000,000
• Operating expenses:
  • Selling expenses: $600,000
  • Depreciation expenses: $450,000
• Operating income: $950,000
• Nonoperating items: $240,000
• Net income: $710,000

Balance Sheet as of May 31, Year 19

• Assets:
  • Cash: $500,000
  • Accounts receivable: $1,100,000
  • Merchandise inventory: $1,000,000
  • Equipment (less accumulated depreciation): $1,300,000
  • Nonoperating assets: $1,100,000
• Total assets: $5,000,000
• Liabilities:
  • Accounts payable: $500,000
  • Notes payable: $450,000
  • Stockholders' equity: $4,050,000
• Total liabilities and stockholders' equity: $5,000,000

Required:

a. Calculate the gross margin percentage. b. Calculate the operating margin percentage. c. Calculate the return on assets (ROA). d. Calculate the return on equity (ROE). e. If Nike, Inc. plans to invest $600,000 in new technology to increase efficiency, expected to increase net income by $150,000, calculate the new ROA and ROE.