The contribution format income statement for Smith 8: Company for its most recent period is given below: Total Unit Sales $588, 888 $ 58.88 Less variable expenses 388,888 38.88 Contribution margin 288,888 28.88 Less fixed expenses 168,888 Operating income 48,888 Less income taxes at 48% 16,888 Net income $ 24,888 The company had average operating assets of $250,000 during the period. Required: 1. Compute the company's ROI 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 ROI gure. Consider each question separately, starting in each case from the original ROI computed in (1) above. 2. The company achieves cost savings of $10,000 per period by using less costly materials. Decrease Increase Unchanged 3. Using lean production, the company is able to reduce the average level of inventory by $50,000. (The released funds are used to pay off bank loans.) (Round your answers to 1 decimal place.) Decrease Increase Unchanged 4. Sales are increased by $50,000: operating assets remain unchanged. (Round your answers to 1 decimal place.} 5. The company issues bonds and uses the proceeds to purchase $75,000 in machinery and equipment at the beginning of the period. Interest on the bonds is $2,000 per period. Sales remain unchanged. The new, more efcient equipment reduces production costs by $4,000 per period. (Round your answers to 1 decimal place.) 6. The company invests $50,000 in 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 answers to 1 decimal place.) 7. Obsolete inventory carried on the books at a cost of $5,000 is scrapped and written off as a loss. (Round your answers to 2 decimal places.)