Ferris Ltd. of Australia has two divisions, one in Perth and one in Darwin. Selected data on the two divisions follow: Sales Operating income Average operating assets Required: 1. Compute the ROI for each division. Perth Darwin ROI % % Division Perth $9,000,000 Darwin $20,000,000 630,000 3,000,000 1,800,000 10,000,000 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. Perth Darwin Residual income 3. Is the Darwin Division's greater residual income an indication that it is better managed? Yes No