Suppose the firm with strategic profit model results above, reduces the number of warehouses for finished goods. This reduces fixed assets by $5,000, inventory by $1,000, and fixed expenses of warehouse operations by 1,000. Assume the only other item affected is variable expense which is reduced by the amount that inventory carrying cost goes down. The firm uses 25% as the inventory carrying cost percentage. What will be the firms new Asset turnover rate?

SALES GROSS MARGIN 300,000 STRATEGIC PROFIT MODEL 100,000 D0O COST OF GOODS 200,000 PROFIT VARIABLE EXPENSES PROFIT MARGIN TOTAL EXPENSES25,000 SALES 60,000 FIXED EXPENSES 35,000 INVENTORY 10,000 ACCOUNTS REC. RETURN ON ASSET SALES ASSET TURNOVER CURRENT ASSETS TOTAL ASSETS30, 30,000 10,000 FIXEDASSETS OTHER CURRENT 105,000 10,000