Question: Problem 3 (15 points). Return on investment (ROI) is a performance measurement tool used to evaluate the managers of investment centers of an organization. ROI

Problem 3 (15 points). Return on investment (ROI) is a performance measurement tool used to evaluate the managers of investment centers of an organization. ROI can also be found as the product of two other ratios: the profit margin (return on sales) ratio and the asset turnover ratio. Below is data available for two investment centers of Pomelo Company. POMELO COMPANY FINANCIAL DATA AVAILABLE FOR INVESTMENT CENTERS Investment Investment Center X Center Y Sales $ 6,000,000 $ 25,000,000 Income 600,000 2,000,000 Investment in Assets 3,000,000 10,000,000 REQUIRED: (1) For each of the investment centers listed, calculate the following performanc measures. (a) Profit margin ratio. (b) Asset turnover ratio. (c) Return on investment. Based upon your calculations in (1) above, which of the investment centers has shown the best performance? Explain the reason for your choice. (2)

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