7 Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO10-1, LO10-2] 82 oints eBook Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division Division Division Sales $ 12,360,000 Average operating assets $ 14,420,000 $ 25,750,000 $ 3,090,000 $ 7,210,000 $ 5,150,000 Not operating income $ 618,000 $ 576,200 $ 824,000 Minimum required rate of return 145 108 164 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Print o References Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 38 Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. (Do not round Intermediate calculations. Round your answers to 1 decimal place.) Margin Turnover ROI Division Division B Division % % % Reg 2 > Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO10-1, LO10-2) 1.82 points eBook Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division Division Sales $ 12,360,000 $ 14, 420,000 Average operating assets $ 25,750,000 $ 3,090,000 $ 7,210,000 $ 5,150,000 Net operating income $ 618,000 $ 576,800 $ 824,000 Minimum required rate of return 100 160 Required: 1. Compute the return on investment (RO) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Print References Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Reg 38 Compute the residual income (loss) for each division. (Do not round intermediate calculations. Loss amounts should be Indicated by a minus sign) Division A Division 3 Division C Residual income (1080) 7 1.82 points Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (L010-1, LO10-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division Division Division Salen 5 12,360,000 $ 14,420.000 $ 25,750,000 Average operating asset $ 3,090,000 $ 7,210,000 $ 5,150,000 Het operating income $ 610,000 $ 576,800 6026,000 Min required rate of return Required: 1 Compute the return on investment (RO) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return 0. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? bill performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Book 101 165 ferences Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 REGJA Reg 35 Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division 7 182 points Exercise 10-12 (Algo) Evaluating New Investments Using Return on investment (ROI) and Residual Income (L010-1, LO10-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division Division Division salon $ 12,360,000 $ 14,420,000 $25,750,000 Average operating assets $ 3,090,000 $ 7,210,000 $ 5,150,000 Het operating income $ 610,000 $ 576, 800 024,000 Minian required rate of return 108 168 Required: 1 Compute the return on investment (Ron for each division using the formula stated in terms of margin and turnover, 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 15% rote of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Book Print References Complete this question by entering your answers in the tabs below. Red 1 Reg 2 Reg 3A Reg 38 Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division Division