The contribution format income statement for Huerra Company for last year is given below TotalUnit Sales Variable expenses $4,000,eee $80.00 2,800,000 56.00 Contribution margin 1,200,000 24.00 848,80016.80 368,000726 108, 000 2.16 $ 252,000 $ 5.04 Fixed expenses Net operating income Income taxes @ 30% Net income The company had average operating assets of $2.000,000 during the year Required: 1 Compute the company's return on investment (ROn for the period using the ROI formula stated in terms of margin and turnover 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 Rol figure Consider each question separately, starting in each case from the data used to compute the original ROl in (1) above 2 Using Lean Production, the company is able to reduce the average level of inventory by $400.000. (The released funds are used to pay off short-term creditors) 3 The company achieves a cost savings of $32.000 per year by using fess costly materials 4 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $500,000 Interest on the bonds is $60,000 per year Sales remain unchanged The new, more efficient equipment reduces production costs by $20,000 per year 5 As a result of a more intense effort by salespeople, sales are increased by 20%, operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory cacded on the books at a cost of $40,000 Is scrapped and written off as a loss 7 At the beginning or the year the company u8 $200,000 orcash trecelved on accounts receivable) to repurchase and retire some of its common stock