Bear Paints is a national paint manufacturer and retailer.(Click the icon to view additional information.)Assume that management has specified a 20% target rate of return.Read the requirements.Requirement 1. Calculate each division's ROI.First enter the formula, then calculate the ROI for each division. (Enter the ROI as a percent rounded to the nearest hundredth of a percentage, X.XX%.)Paint StoresPaint StoresConsumerRequirement 2. Calculate each division's sales margin. Interpret your results.Enter the formula, then calculate the sales margin for each division. (Enter the sales margin as a percent rounded to the nearest hundredth of a percentage, X.XX%.)Sales marginConsumerInterpret your results.ThePaint StoresConsumer+ThePaint Stores+Consumer+Division is more profitable on each dollar of sales.Requirement 3. Calculate each division's capital turnover. Interpret your results.First enter the formula, then calculate the capital turnover for each division. (Round to two decimal places.)Capital turnover%%=XxROI=Division is more efficient in generating sales with its assets.Requirement 4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.First enter the expanded ROI formula, then calculate the ROI for each division. (Enter the ROI as a percent rounded to the nearest hundredth of a percentage, X.XX%.)=%%=%%timestimesROI(%%The Consumer Division's profitability on each dollar of sales isthan the Paint Stores Division's profitability. However, the Paint Store Division's efficiency is significantlyRequirement . Calculate each division's RI. Interpret your results and offer recommendations for any division with negative RI.First enter the formula. then calculate the RI for each division. (Enter the amount in thousands. Use parentheses or a minus sian for negative residual incomes.)Data tableThe company is segmented into five divisions: Paint Stores (brandedretail location), Consumer (paint sold through stores such as SearsHome Depot, and Lowe's), Automotive (sales to auto manufacturers),International, and Administration. The following is selected hypotheticaldivisional information for the company's two largest divisions: PaintStores and Consumer (in thousands of dollars).SalesPaint Stores ...$ 3,850,000 $Consumer.....$ 1,250,000 $Operating IncomePrint519.750175,000DoneTotal Assets$ 1,750,000$ 1,562,500- Xthan the Consumer Division's efficiency. These results cause the Paint Stores Division's ROI to bethe Consumer Division's ROI. Bear Paints is a national paint manufacturer and retailer.(Click the icon to view additional information.)Assume that management has specified a 20% target rate of return.Read the requirements.Paint StoresConsumerThe%-(%-=ROIThe Consumer Division's profitability on each dollar of sales isthan the Paint Stores Division's profitability. However, the Paint Store Division's efficiency is significantlyRequirement . Calculate each division's RI. Interpret your results and offer recommendations for any division with negative RI.First enter the formula, then calculate the RI for each division. (Enter the amount in thousands. Use parentheses or a minus sign for negative residual incomes.)RI%%Paint StoresConsumerInterpret your results and offer recommendations for any division with negative RImeeting management's target rate of return. Theshould work on improving its▼. Improving this may help the division achieve positive residual income.Requirement 6. Total asset data were provided in this problem. If you were to gather this information from an annual report, how would you measure total assets? Describe your measurement choices and some of the pros and cons those choicesMost companies use the▼asset balance since the income used in the ROI calculation is eamed over the year.Management must also decide whether they wish to use the gross book value of assets or the net book value of assets.book value is often used because it is easily pulled from the balance sheet. However, ROI using that value will artificially rise over time due toRequirement 7. Describe some of the factors that management considers when setting its minimum target rate of return.%)C=Requirement 8. Explain why some firms prefer to use RI rather than ROI for performance measurement.RI does a better job ofRequirement 9. Explain why budget versus actual performance reports are insufficient for evaluating the performance of investment centers.Investment centers are responsible forthan the Consumer Division's efficiency. These results cause the Paint Stores Division's ROI to beBudget versus actual performance reports are insufficient because they do not measurethe Consumer Division's ROI.

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