Retum on Investment and Economic Value Added Calculations with varying Assumptions Knitpix Products is a division of Parker Textiles Inc. During the coming year, I expects to earn income of $320,000 based on sales of $2.45 min. Without my new investments, the division will have average operating assets of $3 min. The division is considering a capital investment project-adong knitting machines to produce gaiters--that requires an additional investment of $500,000 and increases net income by $7.500 (sales would increase by $575,000). It made, the investment would increase beginning operating sites by $600,000 and ending operating assets by 5410,000. Assume that the actual cost of capital for the company is 7 Required: 1. Compute the Rot for the division without the investment. Round your answer to two decimal places. 2. Compute the margin and turnover ratios without the investment show that the product of the margin and turnover os equals 1 Rot computed to Requiremele 1. Round your answers to two decimal places Margin Turnover ROI 3. Conceptual Connection: Compute the rol for the crision with the new mvestment. Round your answer to one decimas place Do you think the divisional manager approve the investment Because ROI with the investment is larger than Rot without it the manager will approve the investment 4. Conceptual Connection Compute the margin and turnover rebostorth.con with the investment Round yours to compact How do these compare 4. Conceptual Connection: Compute the margin and turnover ratios for the division with the new investment. Round your answers to two decimal places. How do these compare with the old ratios? Margin % The ratio value increased Turnover The ratio value stayed the same 5. Conceptual Connection: Compute the EVA of the division with and without the investment. EVA without the investment EVA with the investment Should the manager decide to make the knitting machine investment? EVA has increased with the investment, so the manager would approve the investment