Question
Ivanhoe Decor sells home decor items through three distribution channelsretail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center.
Ivanhoe Decor sells home decor items through three distribution channelsretail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:
Retail Stores | Internet | Catalog Sales | ||||
---|---|---|---|---|---|---|
Sales revenue | $10,957,200 | $3,640,000 | $5,319,000 | |||
Variable expenses | 3,970,000 | 1,365,000 | 1,890,000 | |||
Direct fixed expenses | 5,781,908 | 957,320 | 3,088,584 | |||
Average assets | 7,940,000 | 3,640,000 | 1,970,000 | |||
Required rate of return | 12% | 12% | 12% |
(a1)
Calculate the margin and asset turnover for each of the three distribution channels. (Round answers to 2 decimal places, e.g. 5.12% or 5.12.)
Retail Stores | Internet | Catalog Sales | |
---|---|---|---|
Margin | enter percentages % | enter percentages % | enter percentages % |
Asset turnover | enter a ratio | enter a ratio | enter a ratio |
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(a2)
Calculate the ROI for each of the three distribution channels. (Round answers to 2 decimal places, e.g. 5.12%.)
Retail Stores | Internet | Catalog Sales | |
---|---|---|---|
ROI | enter percentages % | enter percentages % | enter percentages % |
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