Zoe, Hardware and More's manufacturing division of lawn-mowing and snow removal equipment, segments its business according to customer type: Professional and Residential. The following divisional information was available for the past year. a (Click the icon to view the divisional information.) Requirements Round all of your answers to four decimal places. 1. Calculate each division's ROI. 2. Calculate each division's prot margin. Interpret your results. 3. Calculate each division's asset turnover. Interpret your results. 4. Use the expanded ROI formula to conrm your results from Requirement 1. What can you conclude? Requirement 1. Calculate each division's ROI. First, enter the formula, and then calculate each division's ROI using the expanded formula. (Enter your answers as a percent, rounded to four decimal places.) Operating income v / Total assets = ROI Residential 55100 I = :|% Professional 1 II 0 o\\ Interpret your results. Each division's ROI is V ; however, the V has an even higher ROI than the V . Requirement 2. Calculate each division's prot margin. Interpret your results. First, enter the formula, and then calculate each division's prot margin. (Enter your answers as a percent, rounded to four decimal places.) I I I = Prot margin Residential l = % Professional II |=| % Interpret your results. The Professional Division is earning about V on each dollar of sales, whereas the Residential Division is only earning about V V higher prot margin helps to account for its higher ROI. on each dollar of sales. 'I Requirement 3. Calculate each division's asset turnover. Interpret your results. First, enter the formula, and then calculate each division's asset turnover. (Round your answers to two decimal places.) Asset turnover Residential times Professional times Interpret your results. The Professional Division is generating about of sales for every dollar of assets. The Residential Division is generating about of sales for each dollar of assets invested. The is more efficient.Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? First, enter the expanded formula, and then calculate each division's ROI using the expanded formula. (Round your final answers to four decimal places. Enter the answer as a percent.) X ROI Residential % X % Professional % X % Confirm your results from Requirement 1. Does your answer for the residential ROI agree with the basic ROI? Does your answer for the professional ROI agree with the basic ROI? What can you conclude? Even though the efficiency (as measured by the asset turnover) is higher than that of the the profitability (as measured by the profit margin) is so much higher that it causes its ROI to be much higher than theDivisional information Operating Total Current Sales Income Assets Liabilities Residential ........ $ 551,000 $ 55,100 $ 190,000 $ 71,000 Professional ...... 750,750 150,150 385,000 152,000 Assume that management has a 26% target rate of return for each division. Also, assume that Zoe's weighted average cost of capital is 17% and its effective tax rate is 32%. -@