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Exercise 11-6 (Static) Contrasting Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Tan Corporation of Japan has two regional divisions with headquarters in
Exercise 11-6 (Static) Contrasting Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow Sales Net operating income Average operating assets Required: Division Osaka $3,000,000 $ 210,000 $ 1,000,000 Yokohama $ 9,000,000 $720,000 $ 4,000,000 1. For each division, compute the return on investment (ROI). 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each division, compute the return on investment (ROI). (Do not round intermediate calculations.) RO Osaka 28 Yokohama 18% Required 2 >
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