Using ROI and RI to evaluate investment centersZims, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year:Management has 21 26% target rate of return for each division.RequirementsCalculate each division’s ROI. Round all of your answers to four decimal places.Calculate each division’s profit margin ratio. Interpret your results.Calculate each division’s asset turnover ratio. Interpret your results.Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude. Net Sales Revenue Operating Income Average Total AssetsResidential$ 550,0001,090,000$ 65,280164,820$ 192,000402,000ProfessionalManaecment bar

1. Calculate each division’s ROI. Round all of your answers to four decimal places.

Answered: Net Sales Revenue Operating Income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Using ROI and RI to evaluate investment centers

Zims, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year:

Management has 21 26% target rate of return for each division.

Requirements

Calculate each division’s ROI. Round all of your answers to four decimal places.
Calculate each division’s profit margin ratio. Interpret your results.
Calculate each division’s asset turnover ratio. Interpret your results.
Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude.

Net Sales Revenue Operating Income Average Total Assets
Residential
$ 550,000
1,090,000
$ 65,280
164,820
$ 192,000
402,000
Professional
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