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The contribution format income statement for Smith 8: Company for its most recent period is given below: Tots]. Unit Sales $500,000 $ 50.00 Less variable expenses 300,000 30.00 Contribution margin 200,000 20.00 Less fixed expenses 160,000 Operating income 40,000 Less income taxes at 40% 16,000 Net income 5 24,000 The company had average operating assets of $250,000 during the period. Required: 1. Compute the company's ROI for the period using the ROI formula stated in terms of margin and turnovel: For each ofthe following qUestions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result ofthe events described, and then compute the new ROI gure Consider eaCh question separately. starting in each case from the original ROI computed in (1) above. 2. The company achieves cost savings of $10,000 per period by using less costly materials, Turnover 3. Using lean production, the company is able to reduce the average level of inventory by $50,000 (The released funds are used to pay off bank loans.) (Round your answers to 1 decimal place.) Turnover 4. Sales are increased by $50,000; operating assets remain unchanged. (Round your answers to 1 decimal place.) Turnover 5. The company issues bonds and uses the proceeds to purchase $75,000 in machinery and equipment at the beginning of the period. Interest on the bonds is $2,000 per period. Sales remain unchanged. The new, more efficient equipment reduces production costs by $4,000 per period. (Round your answers to 1 decimal place.) 6. The company invests $50,000 in cash (received on accounts receivable) in a plot of land that is to be held for possible future use as a plant site. (Round your answers to 1 decimal place.) Margin Turnover 7. Obsolete inventory carried on the books at a cost of $5,000 is scrapped and written off as a loss. (Round your answers to 2 decimal places.) Margin Turnover