8 Exercise 10-12 Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO10-1, L010-2) 166 points Selected sales and operating data for three divisions of different structural engineering firms are given as follows: 8 02:4913 Sales Average operating asset Niet operating income Minimum required rate of return Division Division Division C 57,200,000 11,200,000 $10,300,000 $ 1.440,000 $ 5,600,000 $ 2,060,000 $ 45),600 $ 1,153,600 $365,650 26.00 20.600 23.000 Pin Required: 1. Compute the return on investment (Rol for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income oss) for each division 3. Assume that each division is presented with an investment opportunity that would yleld a 25% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. I performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Herences Complete this question by entering your answers in the tabs below. b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportur Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Req 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 2 decimal places.) Margin Turnover ROI Division Division Division % Reg 2 > Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req Req 3B 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 B Division Residual income (loss) Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Reg 38 Assume that each division is presented with an investment opportunity that would yield a 25% 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 ME Me Complete this question by entering your answers in the tabs below. Reg 1 Reg2 Reg 3A Reg 38 Assume that each division is presented with an investment opportunity that would yleld a 25% 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 B Division