Return on Investment, Margin, Turnover Ready Electronics isfacing stiff competition from imported goods. Its operating incomemargin has been declining steadily for the past several years. Thecompany has been forced to lower prices so that it can maintain itsmarket share. The operating results for the past 3 years are asfollows: Year 1 Year 2 Year 3 Sales $14,000,000 $ 9,500,000 $9,000,000 Operating income 1,200,000 1,295,000 945,000 Averageassets 15,000,000 15,000,000 17,750,000 For the coming year,Ready's president plans to install a JIT purchasing andmanufacturing system. She estimates that inventories will bereduced by 70% during the first year of operations, producing a 20%reduction in the average operating assets of the company, whichwould remain unchanged without the JIT system. She also estimatesthat sales and operating income will be restored to Year 1 levelsbecause of simultaneous reductions in operating expenses andselling prices. Lower selling prices will allow Ready to expand itsmarket share. (Note: Round all numbers to two decimal places.)Required: 1. Compute the ROI, margin, and turnover for Years 1, 2,and 3. Year 1 Year 2 Year 3 ROI % % % Margin % % % Turnover 2.Conceptual Connection: Suppose that in Year 4 the sales andoperating income were achieved as expected, but inventoriesremained at the same level as in Year 3. Compute the expected ROI,margin, and turnover. ROI % Margin % Turnover Why did the ROIincrease over the Year 3 level? 3. Conceptual Connection: Supposethat the sales and net operating income for Year 4 remained thesame as in Year 3 but inventory reductions were achieved asprojected. Compute the ROI, margin, and turnover. ROI % Margin %Turnover Why did the ROI exceed the Year 3 level? 4. ConceptualConnection: Assume that all expectations for Year 4 were realized.Compute the expected ROI, margin, and turnover. ROI % Margin %Turnover Why did the ROI increase over the Year 3 level?