Perez Corporations balance sheet indicates that the company has $610,000 invested in operating assets. During Year 2, Perez earned operating income of $74,420 on $1,220,000 of sales.

Required

a.Compute Perezs profit margin for Year 2.

b.Compute Perezs turnover for Year 2.

c.Compute Perezs return on investment for Year 2.

d. Recompute Perezs ROI under each of the following independent assumptions: (1) Sales increase from $1,220,000 to $1,464,000, thereby resulting in an increase in operating income from $74,420 to $87,840. (2) Sales remain constant, but Perez reduces expenses, resulting in an increase in operating income from $74,420 to $76,860. (3) Perez is able to reduce its invested capital from $610,000 to $488,000 without affecting operating income.