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: Division A Division B Division Sales $ 12,600,000 $ 35,750,000 $ 20,600,000 Average operating assets $ 3,150,000 57,150,000 $ 5,150,000 Net operating income $ 516,600 $ 572,000 $ 597,400 Minimum required rate of return 9.001 9.50% 11.60 Required: 1. Compute the margin turnover and return on investment (Ron 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 return a. If performance is being measured by ROI, which division of divisions will probably accept the opportunity belt performance is being measured by residual income, which division on divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg Reg 3B 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 Turnover ROI Division A Division B Division C % Reg 2 > 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 Reg Req 3B 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 Division C Residual income (loss) Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req 3A Reg 38 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? Division A Division B Division C & Reg 2 Req3B Complete this question by entering your answers in the tabs below. Reqi Reg 2 Reg 3A Req 3B Assume that each division is presented with an investment opportunity that would yield a 10% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division Req 3A