=+Proposal 2: Reduce invested assets by discontinuing a product line. This action would eliminate sales of $75,000, cost of goods sold of $26,600, and operating expenses of $21,400. Assets of $150,000 would be transferred to other divisions at no gain or loss.

Proposal 3: Purchase new and more efficient machinery and thereby reduce the cost of goods sold by $30,000. Sales would remain unchanged, and the old machinery, which has no remaining book value, would be scrapped at no gain or loss. The new machinery would increase invested assets by $250,000 for the year.

Instructions 1. Using the DuPont formula for rate of return on investment, determine the profit margin, investment turnover, and rate of return on investment for the Water Sports Division for the past year.