ZNet Co. is a web-based retail company. The company reports the following for 2017.
Sales ......................................... $ 5,000,000
Operating income .......................... 1,000,000
Average invested assets .................. 12,500,000
The company's CEO believes that sales for 2018 will increase by 20% and both profit margin (%) and the level of average invested assets will be the same as for 2017.
1. Compute return on investment for 2017.
2. Compute profit margin for 2017.
3. If the CEO's forecast is correct, what will return on investment equal for 2018?
4. If the CEO's forecast is correct, what will investment turnover equal for 2018?