Profit Margin,Investment Turnover, andRate of Return on Investment

The condensed income statement for the Consumer Products Division of Milner Industries Inc. is as follows (assuming noservice department charges):

The manager of the Consumer Products Division is considering ways to increase the rate of return on investment.

a. Using theDuPont formulafor rate of return on investment, determine the profit margin, investment turnover, and rate of return on investment of the Consumer Products Division, assuming that $5,000,000 of assets have been invested in the Consumer Products Division. If required, round the investment turnover to one decimal place.

Profit margin	%
Investment turnover
Rate of return on investment	%

b. If expenses could be reduced by $350,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and rate of return on investment for the Consumer Products Division? If required, round the investment turnover to one decimal places.

Profit margin	%
Investment turnover
Rate of return on investment	%