A company reports the following for the past year.

The company’s CFO believes that income for next year will be $1,200,000. Average assets will be the same as the past year.
1. Compute return on investment for the past year.
2. If the CFO’s forecast is correct, what will return on investment be for next year?

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Sales ....... $5,000,000 Income... $1,000,000 Average assets... $12,500,000