(ROT) James Clowe, a division manager of Northfield Oil, provides you with the following information regarding his division:

Beginning of the year assets, $150,000 End of the year assets, $194,000 Revenues for year, $150,500 Expenses for year, $122,500 Variable expenses, 30 percent of total revenues; remaining expenses, fixed.

a. Compute the profit margin for the year.

b. Compute average assets for the year.

c. Compute asset turnover for the year.

d. Compute return on investment for the year.

Exercises PARI' VII Performance Evaluation

e. If Mr. Clowe could increase revenues next year by 25 percent with an in¬ crease in advertising of $15,000 and no changes in asset investment, what would be his new rate of return?