Required:

1.

Compute the companys return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your intermediate calculations and final answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the original ROI computed in (1) above.

2.

Sales are increased by $258,000; operating assets remain unchanged. (Round your intermediate calculations and Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

3.

The company invests $206,000 of 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 intermediate calculations and Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

4.

Obsolete inventory carried on the books at a cost of $23,000 is scrapped and written off as a loss. (Round your intermediate calculations and Turnover answer to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)

The contribution format income statement for Strickland, Inc., for its most recent period is given below: Total 1,134,000 56.70 Unit Sales Variable expenses 680,400 34.02 Contribution margin Fixed expenses 453,600 354,000 22.68 17.70 Net operating income Income taxes @ 40% 99,600 39,840 4.98 1.99 Net income $59,760 2.99 The company had average operating assets of $563,000 during the period