Problem 2A: Evaluating Decentralized Operations (17: 15 + 2) Masters Inc. has reported the following information for its Timber and Furniture Divisions: \begin{tabular}{|l|r|r|} \hline Sales: & Timber Division & \multicolumn{1}{l}{ Furniture Division } \\ \cline { 2 - 2 } & $4,800,000 & $8,500,000 \\ \hline Invested assets: & $2,900,000 & $4,500,000 \\ \hline Total costs and operating expenses: & $3,200,000 & $6,900,000 \\ \hline Minimum rate of return of the whole company: & 20% & 20% \\ \hline Required: & Timber Division & Furniture Division \\ \hline a) Determine the following for both the Divisions: & & \\ \hline i) Income from operation: & & \\ \hline iii) Profit Margin & & \\ \hline iii) Investment turnover & & \\ \hline iv) Return on Investment (ROI) using DuPont formula & & \\ \hline ii) Residual Income & & \\ \hline \end{tabular} Relevant formulae: Profit margin = Income from operation/Sales Investment turnover = Sales/Invested assets ROI = Income from operation/Invested assets Dupont ROI formula = Profit margin x Investment turnover Residual income = Operating income - Minimum desired inocme Minimum desired income = Invested assets x minimum rate of return b) Which division is more efficient in generating revenue and why? b) Should Masters use ROI or RI as their performance evaluation tool to reward the manager while ensuring the overall profitability of the company? Explain your answer in the text box below by referring to the calculations for Timber Division in Problem 2A and 2B