Gilde Industries is a division of a major corporation. Last year the division had total sales of $26,110,000, net operating income of $1,801,590, and average operating assets of $7,000,000. The company's minimum required rate of return is 18%. Required:

PART 1 a. What is the division's margin? (Enter your answer rounded to 2 decimal places.)

b. What is the division's turnover? (Enter your answer rounded to 2 decimal places.)

c. What is the division's return on investment (ROI)? (Enter your answer rounded to 3 decimal places.).

d. What is the division's residual income?

PART 2

The parent company of Gilde Industries is asking the division to take on a new customer. This will be a unique customer and will require a large increase of $2,500,000 in operating assets. This customer will increase sales by $3,000,000 and NOI by $270,000.

a. Recalculate the ROI based on adding the new customer to Gilde Industries. (Enter your answer rounded to 3 decimal places.).

b. Strictly based on ROI alone for the division, should the manager accept or reject the new customer? Why or why not?