Consider the following data (in millions) from Trident Financial Incorporated which has two main divisions, mortgage loans and consumer loans: Mortgage Loans Consumer Loans Average total assets $ 2,000 $ 20,000 Operating income $ 400 $ 2,500 Return on investment (ROI) 20% 12.5% 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. Negative amounts should be indicated by a minus sign. Enter your answers in millions.)

Residual Income (RI) Mortgage Loans Consumer Loans

(a) 10%

(b) 15%

(c) 20%