A condensed income statement for the Commercial Division of Maxel Manufacturing Inc. for the year ended December 31, 2016, is as follows: 1 Sales 2 Cost of goods sold 3 Gross profit 4 Operating expenses 3 Income from operations Invested assets $3,900,000.00 2,690,000.00 $1,210,000.00 820,000.00 $390,000.00 $3,000,000.00 Assume that the Commercial Division received no charges from service departments. The president of Macell Manufacturing has indicated that the division's rate of return on a $3,000,000 investment must be increased to at least 17.00% by the end of the next year it operations are to continue. The division manager is considering the following three proposals Proposal Transfer equipment with a book value of $324,500 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would exceed the amount of depreciation expense on the old equipment by $111.000 This increase in expense would be included as part of the cost of goods sold. Sales would remain unchanged. Proposal 2Purchase new and more efficient machining equipment and thereby reduce the cost of goods sold by $555.000 after considering the effects of depreciation expense on the new equipment Sales would remain unchanged, and the old equipment, which has no remaining book value, would be wrapped at no gain or lous. The new equipment would increase invested stets by an additional $1,819,000 for the you. Proposal Reduce invested mets by discontinuing a product ine. This action would eliminate ale o 5506,000, reduce cost of goods sold by 5400,700, and reduce operating experier by $100,000. Anet of $135.000 would be referred to other divisions at no gain or loss. Required 1. Using the post formade for at of two stes determine the profit magis investment and rate of retum on investment for the Commercial Division for the past year 2. Prepare condensed ested income statements and compute the invested assets for each proposal 3. Waing the DuPont formula for rate of return on investment determine the profit margir investment move and rate of return on investment for each proposal 4. Which of the three proposals would meet the required 17.00% rate of return on investimente? 5. If the Commercial Division were in an industry where the profit margin could not be increased, how much would the investment turnover have to increase to meet the president's required 17.00% rate of return on investment? Enter your increase in investment turnover answer as a percentage of current investment turnover. Do not round interim calculations. * If required, round your answers to one decimal place