,

Zolums,a national manufacturer of lawn-mowing and snow-blowing equipment, segments its business according to customer type: professional and residential. The following divisional information was available for the past year (in thousands of dollars):

		Operating	Total	Current
	Sales	Income	Assets	Liabilities
Residential	$560,000	$59,400	$180,000	$63,000
Professional	1,100,000	166,000	400,000	144,000

Management has a

2525 %

target rate of return for each division.

ZolumsZolums '

weighted average cost of capital is

1313 %

and its effective tax rate is

3030 %.

Requirements

1. Calculate each division's ROI. Round all of your answers to four decimal places.

2. Calculate each division's profit margin. Interpret your results.

3. Calculate each division's capital turnover. Interpret your results.

4. Use the expanded ROI formula to confirm your results from requirement 1. What can you conclude?