Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO11-1, LO11-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating at Net operating income Minimum required rate of return Division $15,250,000 $ 3,050,000 655,250 9.000 Division $35,250,000 $7.050,000 3 520.750 9.50 Division $ 25,250,000 $ 5,050,000 9 732,250 14.500 Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 10% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Regi Hea 2 Reg Reg 30 Compute the margin, turnover, and return on investment (ROI) for each division. (Do not round intermediate calculations Round your answers to 2 decimal places) Margin Tumover ROL Division A Division Division Rag 2 > Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division $15,250,000 $ 3,050,000 $ 655,750 9.000 Division $ 35,250,000 $ 7,050,000 $ 528,750 9.500 Division $25,250,000 $ 5,050,000 $ 732,250 14.500 Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division 2. Compute the residual income (oss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 10% rate of retum. a. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Red 3A 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 Division c Residual income foss) Reg 1 Reg SA > Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating at Het operating income Minimum required rate of return Division 515,250,000 $ 3.050.000 655,750 5.000 Division $ 35,250,000 $7,050,000 5 520.750 9.500 Divisione 525,250,000 5,050,000 732,250 14.500 Required: 1. Compute the margin, turnover, and return on investment (Ron for each division 2. Compute the residual income foss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 10% rate of return; a. I performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Root Reg 2 REGJA Ree Assume that each division is presented with an investment opportunity that would yield a 10% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? lovson A Dinsono Divoon Rag 2 Rag 30 > Exercise 11-14 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating at Het operating income Minimum required rate of return Division $15,250,000 5 3,050,000 5 655, 750 0.000 Division $35,250,000 07.050,000 5 528,750 9.30 Division $25,250,000 5.5.050,000 732,250 Required: 1 Compute the margin, turnover, and return on investment (Ron) for each division 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 10% rate of return 1. If performance is being measured by ROI, which division or divisions will probably accept the opportunity? b. f performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabu below. Reg1 Red 2 REGA Rog 36 Assume that each division is presented with an investment opportunity that would yield a 10% rate of return, it performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? DVORA Division Divo Rog SA