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Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] Selected sales and operating dato for three divisions of

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Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] Selected sales and operating dato for three divisions of different structural engineering firms are given as follows: 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 yeld o 15% rate of return. a. If performance is being measured by ROL, which division or divisions wil probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions wili probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below

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