Exercise 11-8 Contrasting Return on Investment and Residual Income [LO3, LO4] Ferris Ltd, of Australia has two divisions, one in Perth and one in Darwin. Selected data on the two divisions foliow: Required: 1. Compute the ROI for each division. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 16%. Compute the residual income for each division. 3. Is the Darwin Division's greater residual income an indication that it is better managed? Yes No