E24-24 Using ROI and RI to evaluate investment centers Zoes, a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year: Management has a 23% target rate of return for each division. Requirements 1. Calculate each division's ROI. Round all of your answers to four decimal places. 2. Calculate each division's profit margin ratio. Interpret your results. 3. Calculate each division's asset turnover ratio. Interpret your results. 4. Use the expanded ROI formula to confirm your results from Requirement 1 . What can you conclude? Tote: Exercise E24-24 must be completed before attempting Exercise E24-25. 24-25 Using ROI and RI to evaluate investment centers Refer to the data in Exercise E24-24. Calculate each division's RI. Interpret your results. Calculate each division's RI. Interpret your results. Solution: Requirement 3 \begin{tabular}{|l|} \hline Asset Turnover Ratio = Net Sales / Average Total Assets \\ \hline Residential's ROI \\ \hline Professional's ROI \\ \hline \\ \hline \end{tabular} Write narrative response below Requirement 4 \begin{tabular}{|l|} \hline ROI = Profit Margin Ratio Asset Turnover Ratio \\ \hline Residential's ROI \\ \hline \\ \hline \end{tabular} Write narrative response below