Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO10-1, LO10-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: ded Division A Sales Division B Division c $ 12,300,000 $ 14,350,000 $ 25,625,000 Average operating assets $ 3,075,000 $ 7,175,000 $ 5,125,000 Net operating income $ 615,000 $ 574,000 $ 820,000 Minimum required rate of return 141 100 161 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yleld a 15% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Rea Reg 38 Compute the residual income (loss) for each division (Do not round Intermediate calculations. Loss amounts should be Indicated by a minus sign.) Division A Division B Residual income (loss) 180,000 S (140,000) Division C 0