Conner Manufacturing has two major divisions. Management wants to compare their relative performance. Information related to the two divisions is as follows:

Division 1 -

Sales: $200,000

Expenses: $150,000

Asset Investment: $1,000,000

Division 2:

Sales: $45,000

Expenses: $35,000

Asset Investment: $200,000

A. Management discovers that the ROI is the same for both divisions, and wants a deeper evaluation. Which division generates greater profitability per sales dollar?

B. Conner currently requires investments to meet a rate of return on asset investment of 5%. Which division has the greatest level of residual income?

C. Management discovers that the ROI is the same for both divisions, and wants a deeper evaluation. Which division has a higher efficiency in the use of assets to generate sales?