The annual sales forSalco, Inc. were $4.57 million last year.

Thefirm's end-of-year balance sheet was asfollows: Current assets $509,000 Liabilities $1,003,500

Next fixed assets $1,498,000 Owner's Equity $1,003,500

Total Assets $2,007,000 Total $2,007,000

Salco's income statement for the year was asfollows:

Sales $4,570,000

Less: Cost of goods sold (3,503,000)

Gross profit $1,067,000

Less: Operating expenses (506,000)

Net operating income $561,000

Less: Interest expense (91,000)

Earnings before taxes $470,000

Less: Taxes (35%) (164,500)

Net income $305,500

.

a. CalculateSalco's total assetturnover, operating profitmargin, and operating return on assets.

b. Salco plans to renovate one of its plants and the renovation will require an added investment in plant and equipment of $1.09 million. The firm will maintain its present debt ratio of 50 percent when financing the new investment and expects sales to remain constant. The operating profit margin will rise to 13.5 percent. What will be the new operating return on assets ratio(i.e., net operating incomedivided bytotal assets) for Salco after theplant's renovation?

c. Given that the plant renovation in part (b) occurs andSalco's interest expense rises by $45,000 peryear, what will be the return earned on the commonstockholders' investment? Compare this rate of return with that earned before the renovation. Based on thiscomparison, did the renovation have a favorable effect on the profitability of thefirm?

a. CalculateSalco's total assetturnover, operating profitmargin, and operating return on assets.

Thecompany's total asset turnover is 2.28 times. (Round to two decimalplaces.)

Thecompany's operating profit margin is

12.3%. (Round to one decimalplace.)

Thecompany's operating return on assets is

28%. (Round to one decimalplace.)

b.Salco plans to renovate one of its plants and the renovation will require an added investment in plant and equipment of $1.09 million. The firm will maintain its present debt ratio of 50 percent when financing the new investment and expects sales to remain constant. The operating profit margin will rise to 13.5 percent. What will be the new operating return on assets ratio(i.e., net operating incomedivided bytotal assets) for Salco after theplant's renovation?

Thecompany's new operating return on assets is 20%. (Round to one decimalplace.)

c . Given that the plant renovation in part (b) occurs andSalco's interest expense rises by $45,000 peryear, what will be the return earned on the commonstockholders' investment?

The new return onowners' equity is %. (Round to one decimalplace.)

***I have solved parts A and B. I need help with C.***