Assume that Patio Depot, a home improvement warehouse chain, expects each division to earn a 15% target rate of retum. Patio Depot's weighted average cost of capital (WACC) is 11%, and its effective tax rate is 27%. Assume that the company's original Retail Division had the following results last year (in millions of dollars). (Click the icon to view the Retail Division results.) The company's Landscaping Division and Design Division had the following results last year. (Click the icon to view the Landscaping and Design Divisions results.) Requirements Requirement 1. Compute the Retail Division's profit margin, asset turnover, and ROI. Interpret the results in relation to the Landscaping and Design Divisions. (Round your final answer to three decimal places.) First compute the Retail Division's profit margin. 0 Retail Division results Profit margin Now find the Retail Division's asset turnover. Operating income $ 1,440 Asset tumover Total assets Current liabilities 16,350 3,800 26,800 Now find the Retail Division's ROI Sales ROI * Landscaping and Design Divisions results Interpret the Retail Division's results in relation to the Landscaping and Design Divisions. The Retail Division meeting top management's expectations. Its ROI is the asset turnover is those of the other divisions. This means that the original Retail Division ping and Design Divisions. The Patio Depot Landscaping Division Design Division 0.066 bns. Division management Profit margin 0.063 Choose from any list or enter any number in the input fields and then continue to the next questi 3.082 2.623 Asset tumover ROI 0.194 0.174 Interpret the Retail Division's results in relation to the Landscaping and Design Divisions. The Retail Division meeting top management's expectations. Its ROI is the target rate of return. The Retail Division's profit margin is those of the Landscaping and Design Divisions. The asset turnover those of the other divisions. This means that the original Retail Division is generating sales from its assets the Landscaping and Design Divisions. Division management to consider ways to increase the efficiency of its use of divisional assets. is Requirement 2. Compute and interpret the Retail Division's RI. First, compute the Retail Division's RI. (Use parentheses or a minus sign for negative RI. Round your final answer to the nearest whole dollar.) x RI % Now interpret the Retail Division's RI. The RI the ROI results. The division meeting management's target rate of return. Requirement 3. Compute the Retail Division's EVA. What does this tell you? First compute the Retail Division's EVA. (Round your answer to the nearest whole dollar.) The Retail Division's EVA is $ Requirement 4. What can you conclude based on all three financial performance KPIs? ROI, RI, and EVA say that the original Retail Division meeting financial expectations. Top management and stakeholders' expectations are or the division currently performing up to par. Recall that financial performance measures tend to be indicators- The division's managers may currently be to improve the division's future profitability. indicators should be used to project whether such initiatives are pointing the company in the right direction