Guenther Corporation uses the return on investment (ROI) measure to evaluate its managers. A summary of the performance of two divisions is given below:

 

   Division A Division B  Average operating assets $140,000(a) $120,000(b)  Net income 29,400(a)  24,000(b)

 

The minimum required return on operating assets for Guenther Corporation is 19%.

 

 

Required:1-a. Compute the return on investment of Division A and Division B.Division ADivision BReturn on investment%%1-b. According to Guenther's senior management, which division is the better performer?ODivision AOrDivision B2-a. Compute the residual income of Division A and Division B.Division ADivision BResidual income