Effect of proposals on divisional performance
A condensed income statement for the Jet Ski Division of Amazing Rides Inc. for the year ended December 31. 20Y2, is as follows

Assume that the Jet Ski Division received no charges from service departments. The president of Amazing Rides has indicated that the division's rate of return on a $15,000,000 investment must be increased to at least 12% by the end of the next year if operations are to continue. The division manager is considering the following three proposals
Proposal 1: Transfer equipment with a book value of J3.000.000 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would exceed the amount of depreciation expense on the old equipment by $264,000. This increase in expense would be included as part of the cost of goods sold. Sales would remain unchanged.
Proposal 2: Purchase new and more efficient machining equipment and thereby reduce the cost of goods sold by $480,000. Sales would remain unchanged, and the old equipment, which has no remaining book value, would be scrapped at no gain or loss. The new equipment would increase invested assets by an additional $1,000,000 for the year.
Proposal 5? Reduce invested assets by discontinuing the tandem jet ski line. This action would eliminate sales of $2,280,000, cost of goods sold of $1,400,000, and operating expenses of $463,600. Assets of $4,200,000 would be transferred to other divisions at no gain or loss.
Instructions

If the Jet Ski Division were in an industry where the profit margin could not be increased, how much would the investment turnover have to increase to meet the president's required 12% return on investment?

Financial Accounting

College Accounting (Book Only): A Career Approach

College Accounting, Chapters 1-27

Financial And Managerial Accounting

Financial & Managerial Accounting

Accounting

Managerial Accounting: The Cornerstone of Business Decision-Making

Accounting Information Systems

Corporate Financial Accounting

Financial & Managerial Accounting

Accounting (Text Only)

Intermediate Accounting: Reporting And Analysis

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

College Accounting (Book Only): A Career Approach

Financial Accounting

MKTG 12:STUDENT ED.-TEXT

Statistics for Business & Economics, Revised (MindTap Course List)

Fundamentals of Financial Management (MindTap Course List)

Pkg Acc Infor Systems MS VISIO CD

Exploring Economics

Foundations of Business (MindTap Course List)

Management, Loose-Leaf Version

Principles of Macroeconomics (MindTap Course List)

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

Principles of Economics (MindTap Course List)

Contemporary Marketing

ECON MICRO

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Economics:

STATISTICS F/BUSINESS+ECONOMICS-TEXT

Fundamentals of Financial Management (MindTap Course List)

Brief Principles of Macroeconomics (MindTap Course List)

Principles of Microeconomics (MindTap Course List)

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Essentials of Business Communication (MindTap Course List)

ECON MACRO

Essentials of Economics (MindTap Course List)

Principles of Macroeconomics (MindTap Course List)

Accounting Information Systems

Cornerstones of Financial Accounting

PAYROLL ACCT.,2019 ED.(LL)-TEXT

Cornerstones of Cost Management (Cornerstones Series)

Corporate Financial Accounting

Purchasing and Supply Chain Management

Practical Management Science

Micro Economics For Today

Macroeconomics

Economics (MindTap Course List)

Microeconomics

Bcom

Economics For Today