Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow (in millions of yen, denoted by ?):

Required:

1. For each division, compute the ROI in terms of margin and turnover. Where necessary, carry computations to two decimal places.

2. Assume that the company evaluates performance by use of RI and that the minimum required return for any division is 15%. Compute the RI for each division.

3. Is Yokohama?s greater amount of RI an indication that it is better managed than Osaka? Explain.

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Division Osaka Yokohama Sales ¥4,500,000 ¥13,500,000 315,000 Net operating income 1,080,000 1,500,000 Average operating assets 6,000,000