I am needing some help with this question, I have posted this twice before and each answer was all incorrect, not even a little bit close.

The contribution format income statement for Huerra Company for last year is given below:

	Total		Unit
Sales	$	4,000,000	$	80.00
Variable expenses		2,800,000		56.00
Contribution margin		1,200,000		24.00
Fixed expenses		840,000		16.80
Net operating income		360,000		7.20
Income taxes @ 30%		108,000		2.16
Net income	$	252,000	$	5.04

The company had average operating assets of $2,000,000 during the year.

Required:

For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above.

2. At the beginning of the year, obsolete inventory carried on the books at a cost of $40,000 is scrapped and written off as a loss.

WHAT IS THE Margin%,

Turnover =2.04

WHAT IS THE ROI ?

3. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock.

WHAT IS THE Margin%,

Turnover =2.22

WHAT IS THE ROI ?