1. using the DuPont formula for return on investment, determine profit margin, investment turnover, And return on investment for the commercial division the past year.

1.2 ) prepare condensed estimated income statement and compute the invested assets of each proposal.

1.3) use the DuPont formula fire return investment, determine profit margin, investment turnover, and return on investment for each proposal,

A condensed income statement for the Commercial Division of Maxell Manufacturing Inc. for the rear ended December ai is as follows: Sales $3,500,000 Cost of goods sold 2.480,000 Gross profit $1,020,000 Operating expenses 600,000 Income from operations $420,000 Invested assets $2.500.000 Assume that the Commercial Division received no charges from service departments. The president of Maxell Manufacturing has indicated that the division's return on a $2,500,000 investiment must be increased to at least 214 by the end of the next year it operations are to continue. The division manager is considering the following three proposal Proposals Transfer equipment with a book value of $112.500 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would exceed the amount of depreciation pense on the old equipment by 105,000. This increase inexpense would be included as part of the cost of goods sold Sales would remain unchanged. Proposal : Purchase new and more efficient machining equipment and thereby reduce the cost of goods sold by $560,000 after considering the effects of depreciation expense on the new ument Sales would remain unchanged, and the old equipment, which has no remaining book valu, would be scrapped at no gain or lots. The new guiment would increase invested assets by an additional $1.875,000 for the year Proposal : Reduce invested by discontinuing product line. This action would liminate wel of 595.000, reduce cost of goods sold by $406,700, and reduce operating expenses by $175,000. Aus 11.330.000 would be transferred to other divisions of no gain or loss Required