I just need proper work showed for the problem. The answer is down below.

1. Division 1-ROI: 28%; RI: ($100,000)

2. Division 2-ROI: 36%; RI: $600,000

Sterling, Inc. has provided the following data for its two investment centers: Operating income Average total assets Net sales revenue $1,400,000 $5,000,000 $2,000,000 II $3,600,000 $10,000,000 $4,000,000 Assuming both divisions have a target rate of return of 30%, weighted average cost of capital of 55% and its effective tax rate is 30%. Find the ROI, and Residual Income for both divisions