The income statement for Huerra Company for last year is provided below: Totali $12,800,000 10,240,000 $256.00 204.80 Sales Less: Variable expenses 2,560,000 1,280,000 51.20 25.60 Contribution margin Less: Fixed expense 1,280,000 384,000 25.60 7.68 Net operating income Less: Income taxes @ 30% $ 896,000 Net income $17.92 The company had average operating assets of $8,000,000 during the year. Required: 1. Compute the company's ROI for the period using the ROI formula stated in terms of margin and turnover. (Round intermediate calculation to 2 decimal places. Enter your percentage answer rounded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) Answer is complete and correct. 16.00 % ROI 2. Consider each of the following questions separately and then compute the new ROI figure. Indicate whether the ROI will increase, decrease or remain unchanged as a result of the events described a. By using JIT, the company is able to reduce the average level of inventory by $300.000 (The released funds are used to pay off short-term creditors.) (Round intermediate calculation to 2 decimal places. Enter your percentage answer rounded to 2 decimal places (ie 0.1234 should be entered as 12.34).) Answer is complete but not entirely correct. ROI 16.62 % increase b. The company achieves a savings of $13 per unit by using cheaper materials. (Round intermediate and final answer to 2 decimal places.) Answer is complete and correct. 24.13 % increase ROI C. The company issues bonds and uses the proceeds to purchase machinery and equipment, thus increasing the average assets by $200,000. Interest on the bonds is $20.000 per year. Sales remain unchanged. The new more efficient equipment reduces fixed production costs by $10,000 per year. (Round intermediate and final answer to 2 decimal places.) * Answer is complete but not entirely correct. ROI 15.49 % % decrease d. As a result of a more intense effort by the sales staff sales are increased by 20% operating assets remain unchanged (Round intermediate and final answer to 2 decimal places.) & Answer is complete but not entirely correct. ROI 22.40 % increase e. Obsolete items of inventory carried on the records at a cost of $110,000 are scrapped and sold for 159 of the book value. (Use full amount of scrap while calculating average operating assets. Round intermediate calculation to 2 decimal places. Enter your percentage answer rounded to 2 decima places (i.e., 0.1234 should be entered as 12.34).) X Answer is complete but not entirely correct. ROL 16.03 % decrease o f. The company uses $500,000 in cash (received on accounts receivable) to repurchase and retire some of its common shares. The net effect of this transaction is a $500.000 change in average operating assets. (Use full amount of scrap while calculating average operating assets. Round intermediate calculation to 2 decimal places. Enter your percentage answer founded to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) Answer is complete but not entirely correct. 17.07 % % increase ROI g. The company pays a cash dividend to its shareholders, which results in a $400.000 change in average operating assets. (Round intermediate calculation to 2 decimal places. Enter your percentage answer rounded to 2 decimal places (lie, 0.1234 should be entered as 12.34) Answer is complete but not entirely correct. 16 84 % increase ROH