Extreme 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:

Extreme

Extreme 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: Extreme???s management has specified a 16% target rate of return. The company???s weighted average cost of capital (WACC) is 10% and its effective tax rate is 38%. Requirement 1. Calculate each division???s profit margin. Interpret your results. Part 2-11 A. Compute each divisions asset turnover ratio. Interpret your results. B. Use your answers to Requirement 1, along with the profit margin ratio, to recalculate ROI using the expanded formula. Do your answers agree with the basic ROI