AFTER CLASS PRACTICE 10-1 The CEO of Americycle is evaluating the performance of two investment center divisions. Data for the two divisions are given below: Corporate Division Retail Division Sales $42,000,000 56,000,000 Variable costs 21,000,000 28,000,000 Traceable fixed costs 10,000,000 13,000,000 Allocated common costs 2,500,000 3,000,000 Average assets 85,000,000 135,000,000 Required: Prepare a segment margin income statement for Americycle. 2. Calculate ROI for each division. 3. Calculate Residual income for each division. Americycle has a minimum desired rate of return of 11% 4. Americycle is considering adding international operations and can house this division under Corporate or Retail Americycle would need to acquire $84,000,000 in assets. Expected segment margin is $10,000,000. Which division manager is more likely to agree to bring the international operations into their division if ROI is used to evaluate managers? If residual income is used? Explain. 10-6