Financial Exercise $(20$ points$)$ ACME Power Tool Company financial statements: INCOME STATEMENT ENDING BALANCE SHEET$2020$ December $31,2020$Sales $(12,000$ units@$$50/$unit$)$ $$600,000$ Assets Liabilitiesraw materials $($$$30/$unit$)$$$360,000$ Cash$$20,000$ Current Liabilities$$50,000$labor $($$$3/$unit$)$$$36,000$ Accounts Receivable$$30,000$ Long Term Debt$$50,000$scrap $($$$0\mathrm{.}33$ per unit$)$$$4,000$ Inventory$$100,000$ Total Liabilities$$100,000$COGS $($$$33\mathrm{.}33/$unit$)$ $$400,000$ Current Assets$$150,000$ Gross Profit $($$$16\mathrm{.}67$ per unit$)$ $$200,000$ Net Fixed Assets$$50,000$ Shareholder Equity$$100,000$warehousing$$70,000$ transportation$$24,000$ Total Assets$$200,000$ Total Liabilities and Equity$$200,000$other expenses$$6,000$ EBIT $$100,000$ interest$/$taxes $$50,000$ Net Profit $$50,000$ Instructions: Imagine you are a supply chain manager for this company and your base salary is $$75,000$ per year. $$ You participate in a bonus plan where the performance of the supply chain can earn you extra money. Every point above the baseline ROA $(25\%)$ earns you a $$2000$ bonus. While no questions here pertain to your bonus, please consider the motivation a supply chain manager would have to improve ROA. Note: $$Consider each action in $3-7$ as occuring in $2020$ and affecting the financial statements presented. $$ Each action in $3-7$ is independent and separate from other actions. $$ Questions $1$ and $2$ are worth $1$ point each. $$ Questions $3-8$ are worth $3$ points each. $1.$ Baseline ROA: $$Return On Assets $(\%)=$ profits$/$assets $1)$ answer $2.$Baseline Inventory turns $=$ COGS$/$Inventory $2)$ answer $3.$Must do an expedited delivery of $100$ units costing additional $$20$ per unit in transportation costs. $$ Will the company make or lose money on this transaction? $3)$ answer $4.$Through good management practices you are able to double your inventory turns. COGS remained the same, but inventory was cut in half. $$Consider the effect this will have on ROA. If no other numbers change, what will be the new ROA? $4)$ answer $5.$Using a reverse auction, Purchasing is able to reduce raw materials by $$0\mathrm{.}25$ per unit. Consider how this will affect ROA. $$If no other numbers change, what will be the new ROA? $5)$ answer $6.$Through more efficient packaging, raw material cost is reduced by $5\%$ and transportation expense is reduced by $10\%.$Consider the effect on ROA. $$If no other numbers change, what will be the new ROA? $6)$ answer $7.$Using a streamlined EDI billing process, the company is able to convert accounts receivables to cash much faster, which will reduce accounts receivable, and increase cash at the end of the year. $$How will this affect the company's financial picture at the end of the year? $7)$ answer $8.$Please take a moment to reflect on this exercise and write four or five sentences describing what you have learned$\mathrm{.}8)$ answer