Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow:

Division Osaka Yokohama

Sales $9,300,000 $23,000,000

Net operating income $ 651,000 $2,070,000

Average operating assets $ 2,325,000 $11,500,000

Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover.

Osaka Yokohama

ROI %__?_ % __?__

Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 14%. Compute the residual income for each division.

Osaka/ Yokohama

Average operating assets ___?__

Net operating income____?____

Min. required return on assets ___?_

residual income ___?___

Is Yokohamas greater amount of residual income an indication that it is better managed?