19-26 Return on Investment and Residual Income Consider the following data (in millions) from Trident Financial Inc., which has two main divisions, mortgage loans and consumer loans: Mortgage Loans Consumer Loans Average total assets $2,000 Operating income $400 Return on investment (ROI) 20%

1.Based on ROI, which division is more successful?

2.Trident uses residual income (RI) as a measure of the financial performance of its divisions. What is the RI for each division if the minimum desired rate of return is

(a) 10%

(b) 15%

(c) 20%