1. Pool Accessories, Inc., has two divisionsFurniture and Supplies. Assume for both divisions that the tax rate is 30 percent, and the cost of capital is 8%. The following segmented financial information is for the most recent fiscal year ended December 31.

	Furniture Division	Supplies Division
Sales	$3,000,000	$1,000,000
Cost of goods sold	1,600,000	430,000
Allocated overhead	375,000	125,000
Selling and administrative expenses	250,000	200,000
Average net operating assets	$8,500,000	2,100,000

1. Using profit margin ratio as the measure of profitability, which division is most profitable? (10.3)