Consider the following data (in millions) from Trident Financial Inc., which has two main divisions, mortgage loans and consumer loans:

	Mortgage Loans			Consumer Loans
Average total assets	$	1,100		$	21,250
Operating income	$	242		$	2,550
Return on investment (ROI)		22.00	%		12.00	%

Required:

1. Based on ROI, which division is more successful?

• Mortgage loans

• Consumer loans

2. Trident uses residual income (RI) as a measure of the financial performance of its divisions. What is the RI for each division if the minimum desired rate of return is (a) 10%, (b) 15%, and (c) 20%? (Leave no cells blank. Enter "0" wherever required. Negative amounts should be indicated by a minus sign. Enter your answers in millions of dollars, rounded to nearest whole number.)

Solve:

Residual Income (RI) Mortgage Consumer Loans Loans (a) 10% (b) 15% (c) 20%