E10-22A Compute ROI and residual income (LO 3) Results from Elite Corporation's most recent year of operations are presented in the following table. 1. Calculate the sales margin. cabital turnover. and return on investment (ROI). 2. Calculate the residual income (RI). Epic Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and in-line skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-Snow Sports. The following divisional information is available for the past year: S10-7 Calculate ROI Calculate each division's ROI. Snow Sports: Non-Snow Sports: 1) Top management has extra funds to invest. Which division will most likely receive those funds? Why? 2) Can you explain why one division's ROI is higher? How could management gain more insight? S10-8 Refer to the Epic Sports Data Set. Compute sales margin and capital margin turnover Compute each division's sales margin. Interpret your results. Snow Sports: Non-Snow Sports: Compute each division's capital turnover (round to two decimal places). Interpret your results. Snow Sports: Non-Snow Sports: Use your answers to Question 2 along with your answers to Question 1 to recalculate ROI using the expanded formula. Do your answers agree with your ROI calculations in S107 ? S10-9 Compute residual income Refer to the Epic Sports Data Set. Compute each division's residual income. Interpret your results. Are your results consistent with each division's ROI? Epic's management has specified a target 16\% rate of return. Snow Sports: Non-Snow Sports