Question
. Kiri King Corp. of Indonesia has two regional divisions with headquarters in Kuala Lumpur and Ipoh. Selected data on the two divisions follow: Division
. Kiri King Corp. of Indonesia has two regional divisions with headquarters in Kuala Lumpur and Ipoh. Selected data on the two divisions follow: Division Kuala Lumpur Ipoh Sales $ 1,000,000 $ 4,500,000 Net operating income $ 80,000 $ 135,000 Average operating assets $ 800,000 $ 2,250,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. Where necessary, carry computations to two decimal places. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 3%. Compute the residual income for each division
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