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E22-20 Presented below is selected information for three regional divisions of Medina Company Divisions West S 300,000 500,000 S 400,000 S 140,000 360,000 210,000 $2,000,000

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"E22-20 Presented below is selected information for three regional divisions of Medina Company Divisions West S 300,000 500,000 S 400,000 S 140,000 360,000 210,000 $2,000,000 North South Contribution margin Controllable margin Average operating assets Minimum rate of return $1,000,000 $1,500,000 13% 16% 10% Instructions (a) Compute the return on investment for each division. (b) Compute the residual income for each division. (e Assume that each division has an investment opportunity that would provide a rate return of 16%. 1) If ROI is used to measure performance, which division or divisions will probably ) make the additional investment? (2) If residual income is used to measure performance, which division or divisions will probably make the additional investment

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