In response to declining foot traffic, a hardware store offers the following promotion: "Send your teenager to pick up your order and save 20% on delivery fees. We charge $15 delivery, but teens can use our store bikes for free." You've collected the following information from the hardware store's financial statements: Sales (thousands) $850 Net income $42.5 Total assets $420 Total equity $210 1. What is the profit margin for using teens as delivery people as a percentage of what customers would normally pay, and what is the profit margin for the store? 2. What is the store's ROA?
In response to declining foot traffic, a hardware store offers the following promotion: "Send your teenager to pick up your order and save 20% on delivery fees. We charge $15 delivery, but teens can use our store bikes for free." You've collected the following information from the hardware store's financial statements: Sales (thousands) $850 Net income $42.5 Total assets $420 Total equity $210 1. What is the profit margin for using teens as delivery people as a percentage of what customers would normally pay, and what is the profit margin for the store? 2. What is the store's ROA?
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Transcribed Image Text:In response to declining foot traffic, a hardware store offers
the following promotion: "Send your teenager to pick up your
order and save 20% on delivery fees. We charge $15 delivery,
but teens can use our store bikes for free." You've collected
the following information from the hardware store's financial
statements:
Sales
(thousands)
$850
Net income $42.5
Total assets $420
Total equity $210
1. What is the profit margin for using teens as delivery
people as a percentage of what customers would
normally pay, and what is the profit margin for the
store?
2. What is the store's ROA?
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