The Norsk Division of Gridiron Concepts Inc. has been experiencing revenue and profit growth during the years

Question:

The Norsk Division of Gridiron Concepts Inc. has been experiencing revenue and profit growth during the years 2012€“2014. The divisional income statements are provided below.

Assume that there are no charges from service departments. The vice president of the division, Tom Yang, is proud of his division€™s performance over the last three years. The president of Gridiron Concepts Inc., Anna Evans, is discussing the division€™s performance with Tom, as follows:
Tom: As you can see, we€™ve had a successful three years in the Norsk Division.
Anna: I€™m not too sure.
Tom: What do you mean? Look at our results. Our income from operations has more than doubled, while our profit margins are improving.
Anna: I am looking at your results. However, your income statements fail to include one very important piece of information; namely, the invested assets. You have been investing a great deal of assets into the division. You had $ 735,000 in invested assets in 2012, $ 1,500,000 in 2013, and $ 3,500,000 in 2014.
Tom: You are right. I€™ve needed the assets in order to upgrade our technologies and expand our operations. The additional assets are one reason we have been able to grow and improve our profit margins. I don€™t see that this is a problem.
Anna: The problem is that we must maintain a 15% rate of return on invested assets.
1. Determine the profit margins for the Norsk Division for 2012€“2014.
2. Compute the investment turnover for the Norsk Division for 2012€“2014. Round to two decimal places.
3. Compute the rate of return on investment for the Norsk Division for 2012€“2014.
4. Evaluate the division€™s performance over the 2012€“2014 time period. Why was Anna concerned about theperformance?