Below are the financial statements for AT&T's Telecommunications Division for the fiscal year ending December 31, Year 18:

Income Statement:

• Sales revenue: $3,600,000
• Cost of goods sold: $2,000,000
• Gross profit: $1,600,000
• Operating expenses: $500,000
• Depreciation: $200,000
• Operating income: $900,000
• Interest expense: $120,000
• Gain on sale of investments: $60,000
• Net income: $840,000

Balance Sheet:

• Cash: $250,000
• Accounts receivable: $450,000
• Inventory: $550,000
• Property, plant, and equipment (net): $800,000
• Total assets: $2,050,000
• Accounts payable: $300,000
• Long-term liabilities: $500,000
• Stockholders' equity: $1,250,000
• Total liabilities and equity: $2,050,000

Requirements:

1. Calculate the ROI for AT&T's Telecommunications Division.
2. Evaluate the operating income margin.
3. Determine the impact of interest expense on net income.
4. Compute the debt to equity ratio.
5. Assess the significance of the gain on sale of investments.