Dale Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:

Required
a. Calculate the margin, asset turnover, and ROI for each of the three distribution channels.
b. The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost
$800,000 and is expected to generate $160,000 in additional annual segment margin.
If distribution channel managers are evaluated based on the trend of their ROIs, which managers will invest in the system? Explain your reasoning.

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Retail Stores Internet Catalog Sales 10,000,000 $4,000,000 1,500,000 Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return 4,000,000 4,500,000 8,000,000 12% $3,200,000 1,800,000 1,200,000 2,000,000 4,000,000 12% 12%