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	$	10,400,000	$	34,000,000
Net operating income	$	520,000	$	2,380,000
Average operating assets	$	2,600,000	$	17,000,000

2.	Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 12%. Compute the residual income for each division.
	Osaka Yokohama

Average Operating Income:

Net Operating Income

Minimum Required Return on Average Asset

Residual Income