PAVONE COMPANY Divisional Income Statements For the Year Ended December 31 1. Business Divisiorn Division Sales Cost of goods sold Gross profit Operating expenses Income from operations 2. Retum on Investment (ROI) Profit Margin x Investment Tumover Income from Operations Sales Sales Invested Assets Return on Investment (ROI) Business Division: ROI Consumer Division: ROI = Business Consumer Division Division Income from operations Minimum acceptable return Residual income Key essay answer here) PAVONE COMPANY Divisional Income Statements For the Year Ended December 31 1. Business Divisiorn Division Sales Cost of goods sold Gross profit Operating expenses Income from operations 2. Retum on Investment (ROI)Profit Margin x Investment Tumover Income from Oporatonsvested Assets Sales Invested Assets Return on Investment (ROI) Sales Business Division: ROI Consumer Division: ROI Business Consumer Division Division Income from operations Minimum acceptable retum Residual income Key essay answer here) PR 24-SA Divisional performance analysis and evaluation two divisions organized statement data for the past year for each 2. Business vision ROL 20.0% OBJ.4 operations of Pavone Company is evaluating the performance of as investment centers. Invested assets and condensed income division are as follows: Excel Business Division Consumer Division Sales Cost of goods sold Operating expenses Invested assets $2,500,000 1,320,000 930,000 1,250,000 1,350,000 843,000 2,125,000 Me How Invested asexpenses 1320,000 $2.50,000 Instructions assuming that there were no service department charges. 2. Using the DuPont formula for return on investment, determine the profit margin, 3. If management wants a minimum acceptable return of 17%, determine the residual 4. Discuss the evaluation of the two divisions investment turnover, and return on investment for each division. Round percentages and the investment turnover to one decimal place. income for each division. determined in parts (1), (2), and (3) iscuss the evaluation of the two divisions, using the performance measures