Sorrento Company Segmented Income Statements for the Current Fiscal Year Ended December 31 (dollar amounts are in thousands) Northwest Division East South Division Division Sales Cost of goods sold Gross margin Allocated overhead Selling and administrative expenses Operating income Income tax expense (35% rate) Net income $ 22,000,000 10.000.000 $ 12,000,000 4,125,000 5,000,000 $ 2.875.000 1,006,250 $ 1,868,750 S 8,000,000 2,000,000 $ 6,000,000 1,500,000 3,200,000 $ 1,300,000 455,000 5 845,000 $ 18,000,000 7,000,000 5 11,000,000 3,375.000 5.000.000 2.625.000 918.750 S1706250 Required: a. Calculate return on investment for each division. b. What does return on investment tell us about each division? Indicate why this measure is useful in evaluating investment centers. 26. Return on Investment (ROI) Using Operating Profit Margin and Asset Turnover. Sorrento Company has three divisions--Northwest, South, and East. (This is the same company as the previous exercises. This exercise can be assigned independently) Segmented income statement information for the most recent fiscal year ended December 31 is shown as follows. Assume average operating assets totaled $15,000,000 for the Northwest division, $6,500,000 for the South division, and $17,500,000 for the East division