Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).

Investment Center Sales Income Average

Invested Assets Electronics $ 42,000,000 $ 3,360,000 $ 16,800,000 Sporting goods 19,456,000 2,432,000 12,800,000

1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?

2. Assume a target income level of 10% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?

3. Assume the Electronics department is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted?

Required 1 Required 2 ' Required 3 Compute return on investment for each department. Using return on investment which department is .most efcient at using assets to generate returns for the company? Return on Investment Electronics Sporting Goods Which department is most efcient at using assets to generate retums for the company? Complete this question by entering your answers in' the' tabs'below. Required 1 Required 2 Required 3 Assume a target income level of 10% of average invested assets. Compute residual income for each department. Which department generated the most residual income fer the company? Net income Target net income Residual in come Which department is most efcient at using assets to generate returns for the company?