Dale Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:

Required
a. Calculate the margin, asset turnover, and ROI for each of the three distribution channels.
b. The corporate office is giving the managers of each channel the option of a customer relationship management system that will allow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost
$800,000 and is expected to generate $160,000 in additional annual segment margin.
If distribution channel managers are evaluated based on the trend of their ROIs, which managers will invest in the system? Explain your reasoning.

Retail Stores Internet Catalog Sales 10,000,000 $4,000,000 1,500,000 Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return 4,000,000 4,500,000 8,000,000 12% $3,200,000 1,800,000 1,200,000 2,000,000 4,000,000 12% 12%