Problem 11-20 (Algo) Return on Investment (ROI) Analysis (LO11-1] The contribution format income statement for Huerra Company for last year is given below: unt Sales Variable expenses Contribution margin Fixed expenses Net operating income Income taxes @ 40% Net income Total $ 1,004,000 602,400 401,600 321,600 80,000 32,000 $ 48,000 Unit $ 50.20 30.12 20.08 16.08 4.00 1.60 $ 2.40 The company had average operating assets of $504,000 during the year. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $125,000. Interest on the bonds is $19,000 per year. Sales remain unchanged. The new, more efficient equipment reduces production costs by $6,000 per year. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Show less % Margin Turnover 4.00 $ 1.60 6.40 $ Effect Increase Increase Increase X ROL % As a result of a more intense effort by sales people, sales are increased by 25%; operating assets remain unchanged. (Round your intermediate calculations and final answers to 2 decimal places.) Margin % Effect Increase Increase Increase 4.78 X 2.50 11.95 X Turnover ROI %