1. Return on Investment (ROI) Profit Margin x Investment Turnover Return on Investment (ROI) Income from Operations Sales Sales Invested Assets Electronics Division: ROI GIHBLI INDUSTRIES INC. ELECTRONICS DIVISION Estimated Income Statements For the Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Income from operations Proposal 1 $ 1,575,000 859,600 $ 715,400 558,000 $ 157,400 Proposal 2 $ 1,395,000 771,450 $ 623,550 498,000 $ 125,550 Proposal 3 $ 1,575,000 702,000 $ 873.000 558,000 315.000 Invested assets $ 750,000 937.500 $ 1.968,750 3. Return on investment (ROI) Profit Margin x Investment Turnover Return on Investment (ROI) Income from Operations Sales X Sales Invested Assets Proposal 1: ROI Proposal 2: ROI Proposal 3: ROI meet(s) the required 20% return on investment Return on Investment (ROI) = Profit Margin Required Investment Turnover 20% 8% * Required Investment Turnover 2.50 Required investment Tumover = Current Investment Turnover = Increase in Investment Turnover = PR 24-48 Effect of proposals on divisional performance Obj4 A condensed income statement for the Electronics Division of Gibili Industries Inc. for the year ended December 31 is as follows Excel