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Tom and Jerry are both managers of sales teams at Indigo Corp., a furniture company whose most popular item is a tweed couch. Tom and
Tom and Jerry are both managers of sales teams at Indigo Corp., a furniture company whose most popular item is a tweed couch. Tom and Jerry are very competitive and each attempt to outperform one another every year. Currently, Tom's department has better metrics, which has resulted in larger bonuses for Tom and his team. Indigo Corp. evaluates both departments based upon each team's respective return on investment and economic value added. The departments reported the following financial data during the most recent year: It should be noted that Indigo uses average operating assets as its definition of investment, and it has a minimum required rate of return of 8.72% and a tax rate of 22%. Indigo has used a variety of ways to acquire capital and has the current makeup: proportion of equity is 38%, the equity rate is 6.5%, the proportion of debt is 62%, and the debt rate is 9.3%. Use this information to answer the following questions. What are the return on sales, investment turnover, and return on investment for each department? Note which department has performed better for each calculation. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 15.25 or 15.25\%.) Department has performed better Jerry Tom
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