Clifton Corporation’s balance sheet indicates that the company has $100,000 invested in operating assets. During 2011, Clifton earned $16,000 of operating income on $320,000 of sales.

Required

a. Compute Clifton’s operating profit margin for 2011.

b. Compute Clifton’s turnover for 2011.

c. Compute Clifton’s return on investment for 2011.

d. Recompute Clifton’s ROI under each of the following independent assumptions.

(1) Sales increase from $320,000 to $360,000, thereby resulting in an increase in operating income from $16,000 to $18,900.

(2) Sales remain constant, but Clifton reduces expenses, thereby resulting in an increase in income from $16,000 to $16,800.

(3) Clifton is able to reduce its operating assets from $100,000 to $96,000 without affecting income.