Refer to the Extreme Sports Data Set.
1. Compute each division's sales margin. Interpret your results.
2. Compute each division's capital turnover (round to two decimal places). Interpret your results.
3. Use your answers to Question 2 along with your answers to Question 1 to recalculate ROI using the expanded formula. Do your answers agree with your ROI calculations in S10-7?
Extreme Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year:

Extreme's management has specified a target 16% rate of return. The company's weighted average cost of capital (WACC) is 10%, and its effective tax rate is 37%.

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Operating Income Total Assets Current ון ialilliiesto $5,200,000 $1,040,000 $4,000,000 $470,000 Non-Snow Sports...$8,400,000 $1,680,000 $6,000,000 $770,000 Sales