Division
	X		Y		Z
Invested capital	$1,080,000		$		$1,220,000
Income	$		$142,800		$139,080
Revenue	$2,268,000		$2,856,000		$
Income percentage of revenue	3	%		%		%
Capital turnover					3.8
Rate of return on invested capital		%	10.5	%		%

Requirement 1. Prepare a similar tabular presentation, filling in all blanks, one division at a time. (Round your answers to one decimal places.)

Division

	X
Invested capital	$1,080,000
Income
Revenue	$2,268,000
Income percentage of revenue	3	%
Capital turnover
Rate of return on invested capital		%

Y
$142,800
$2,856,000
	%
10.5	%

Z
$1,220,000
$139,080
	%
3.8
	%

Requirement 2. Which division is the best performer? Explain.

If the criterion for judging relative performance is ROI,

division Z / division X / division Y is the best performer because it has the highest / lowest calculated ROI.

Requirement 3. Suppose each division is assessed an imputed interest rate of

12 %on invested capital. Compute the residual income for each division.

Begin by selecting the formula and then enter the amounts in the formula and calculate the residual income for each division. (Complete all answer boxes. For a $0 residual income, make sure to enter "0" in the appropriate cell. Use a minus sign or parentheses for a negative residual income.)

-

=

Residual income

Division X		-		=
Division Y		-		=
Division Z		-		=