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Effect of Proposals on Divisional Performance A condensed income statement for the Jet Ski Division of Amazing Rides Inc. for the year ended December 31, 20Y2, is as follows: Sales Cost af goods sold Gross profit Operating expense Operating income Invested assets Assume that te Jet Ski D ision rece ve no charges from serv ce departments. The president of Amazing Rides has r cated that the d n's rate of return on a $2 600 000investment must be increased to at least 16.5% by the end of the next year if operations are to continue. The division manager is considering the following three proposals: Proposal 1: Transfer equipment with a book value of $520,000 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would exceed the amount of depreciation expense on the old equipment by $93,600. This Increase in expense would be Included as part of the cost of goods sold. Sales would remain unchanged Proposal 2: Purchase new and more efficlent machining equipment and thereby reduce the cost of ooods sold by $343,200. Sales would remain unchanged, and the old equlpment, which has no remaining book value, would be scrapped at no gain or loss. The new equipment would increase invested assets by an additional $1,300,000 for the year Proposal 3: Reduce invested assets by discontinuing the tandem jet ski line. This action would eliminate sales of $552,500, cost of goods sold of $369,200, and operating expenses of $162,500. Assets of $1,316,400 would be transferred to other divisions at no gain or loss $3,120,000 (2,309,800) 810,200 (467,000) $343,200 2,600,000 Using the DuPont formula for return on investment determine the profit margin, investment turnover, and return on investment for the Jet Ski Division for the past year. For investment turnover and ROI, round to one decimal place. Jet Ski Division Profit margin nvestment turnover ROI Prepare condensed estimated income statements and compute the invested assets for each proposal. Amazing Rides Inc.-Jet Ski Division EstimatedI For the Year Ended December 31, 20Y2 Proposal 1 Proposal 2 Proposal 3 Sales Cost of goods sold Gross profit Operating Operating income Invested assets Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each proposal. Round interim calculations (including previously calculated) and final answer to one decimal place Profit margin Investment tu rnover ROI Proposal 1 Proposal 2 Proposal 3 Select whether each of the three proposals would meet the required 16.5% return on investment. Proposal 1 Proposal 2: Proposal 3: If the jet Ski Division were in an industry here the profit mar in could not be increased ho two decimal places and your final answer to one decimal place. much would the investment turnover have to increase to meet the president's required 16.5% return on nvestment? Round intermediate calculations to