Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division. Furniture Division: Year 1 Year 2 Sales $35,100,000 $38,400,000 Operating income 1,370,000 1,500,000 Average operating assets 7,630,000 7,630,000 Houseware Division: Year 1 Year 2 Sales Operating income Average operating assets $11,600,000 610,000 5,550,000 $13,000,000 600,000 5,550,000 At the end of Year 2, the manager of the Houseware Division is concerned about the division's performance. As a result, he is considering the opportunity to invest in two independent projects. The first is called the Espresso-Pro; it is an in-home espresso maker that can brew regular coffee as well as make espresso and latte drinks. While the market for espresso drinkers is small initially, he believes this market can grow, especially around gift- giving occasions. The second is the Mini-Prep appliance that can be used to do small chopping and dicing chores that do not require a full-sized food processor. Without the investments, the division expects that Year 2 data will remain unchanged. The expected operating incomes and the outlay required for each investment are as follows: Espresso-Pro Mini-Prep Operating income Outlay Espresso-Pro $28,000 200,000 Mini-Prep $15,200 150,000 Jarriot's corporate headquarters has made available up to $590,000 of capital for this division. Any funds not invested by the division will be retained by headquarters and invested to earn the company's minimum required rate of return, 10 percent. Required: Round your answers to four decimal places before converting to a percentage. For example, .06349 would be rounded to .0635 and entered as "6.35" percent. 1. Compute the ROI for each investment. Espresso-Pro ROI % Mini-Prep ROI % 2. Compute the divisional ROI for each of the following four alternatives: a. The Espresso-Pro is added. % b. The Mini-Prep is added. b. The Mini-Prep is added. % c. Both investments are added. d. Neither investment is made; the status quo is maintained. Assuming that divisional managers are evaluated and rewarded on the basis of ROI performance, which alternative do you think the divisional manager will choose? Calculating Average Operating Assets, Margin, Turnover, Return on Investment (ROI) Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Cleaning Products Division Division Sales $41,604,000 $34,800,000 Operating income 3,328,320 1,044,000 Operating assets, January 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Required: 1. For the Small Appliances Division, calculate: a. Average operating assets $ b. Margin % c. Turnover d. Return on investment (ROI) % 2. For the Cleaning Products Division, calculate: a. Average operating assets $ b. Margin % c. Turnover c. Turnover d. Return on investment (ROI) % 3. What if operating income for the Small Appliances Division was $2,496,240? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios. When required, round the percent to four decimal places before converting to a percentage. For example, .88349 would be rounded to .8835 and entered as 88.35. Enter "0", where ever required. Average operating assets by % Margin by % Turnover by % Return on investment (ROI) by %