10-12 Return on investment (LO 3) Dale Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Retail Stores Internet Catalog Sales Sales revenue $10,000,000 $4,000,000 $3,200,000 Variable expenses 4,000,000 1,500,000 1,800,000 Direct fixed expenses 4,500,000 1,000,000 1,200,000 Average assets 8,000,000 4,000,000 2,000,000 Required rate of return 12% 12% 12% Required a. Calculate the margin, asset turnover, and ROI for each of the three distribution channels. b. The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost $800.000 and is expected to generate $160,000 in additional annual segment margin. If distributior channel managers are evaluated based on the trend of their ROIs which managers will invest in the system? Explain your reasoning. C. Calculate the current residual income for each distribution channel. Calculate the residual income of each distribution channel assuming it purchases the new customer relationship management system. e.Why is the residual income for each distribution channel higher in part (b) than in part (a)