Kelli Davis is in the flower business. While business has been steady, she wonders if she should expand her business to include candy as well. Both flowers and candy fit well into her business model. Kelli provides the following projections of annual sales, net income, and average total assets for the flower business alone and for the business if both flowers and candy were sold.

Required:
1. Calculate Kelli€™s return on assets, profit margin, and asset turnover for flowers only.
2. Calculate Kelli€™s return on assets, profit margin, and asset turnover for flowers and candy.
3. Based on these ratios, what recommendation would youmake?

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Sales Net income Average total assets Flowers On $380,000 40,000 200,000 Flowers and Candv 500,000 60,000 250,000