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

Investment Center		Sales		Net Income	Average Invested Assets
Electronics	$	40,000,000	$	2,880,000	$	16,000,000
Sporting goods		20,000,000		2,040,000		12,000,000

1.1

Compute return on investment for each department.

Return on Investment
	Choose Numerator:	/	Choose Denominator:	=	Return on Investment
		/		=	Return on Investment
Electronics		/		=
Sporting Goods		/		=

Assume a target income level of 12% of average invested assets. Compute residual income for each department.

Investment Center	Electronics	Sporting Goods