The condensed income statement for the Consumer Products Division of Hydra Industries Inc. is as follows (assuming no support department allocations):

The manager of the Consumer Products Division is considering ways to increase the return on investment.
a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $106,000,000 of assets have been invested in the Consumer Products Division.
b. If expenses could be reduced by $5,300,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division?

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Sales Cost of goods sold Gross profit Administrative expenses Operating income $ 265,000,000 (142,500,000) $ 122,500,000 (80,100,000) $ 42,400,000