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B points Exercise 19-26 (Static) Return on Investment and Residual Income (LO 19-1, 19-2] Consider the following data (in millions) from Trident Financial Incorporated
B points Exercise 19-26 (Static) Return on Investment and Residual Income (LO 19-1, 19-2] Consider the following data (in millions) from Trident Financial Incorporated which has two main divisions, mortgage loans and consumer loans: Average total assets Operating incone Return on investment (ROI) Required: Loans $2,000 $400 20% 1. Based on ROI, which division is more successful? Mortgage loans o Consumer loans Consumer Loans $ 20,000 $2,500 12.5k 2. Trident uses residual income (R) as a measure of the financial performance of its divisions. What is the 2 for each division if the minimum desired rate of return is (a) 10%, (b) 15%, and (c) 20% (Leeve no cells blank. Negative amounts should be indicated by a minus sign. Enter your answers in millions.) Answer is not complete. Residual Incoop 889 Mongage Consumer Luas Loans 10% 200 s 15% 100 670 O (540) 20%
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