The following information is from the 2016 annual report of Tellarite Company, a company that supplies manufactured parts to the phaser industry....

The following information is from the 2016 annual report of Tellarite Company, a company that supplies manufactured parts to the phaser industry.

                       Average total assets.............................. $24,500,000

                       Average interest-bearing debt................. 10,000,000

                       Average other liabilities............................. 2,250,000

                       Average shareholders' equity.................. 12,250,000

                       Sales......................................................... 49,000,000

                       Interest expense........................................... 800,000

                       Net income................................................. 2,450,000

REQUIRED:

1.    Show the calculation of Tellarite's ROA for 2016 using a combined federal and state income tax rate of 40% where needed.

2.    Show the calculation of the profit margin and turnover components of ROA for 2016.

3.    Tellarite's management believes that various business initiatives will produce an asset turnover rate of 2.25 next year. If the profit margin next year is unchanged from 2016, what will be the company's ROA? Please show the calculation.