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	$	10,000,000	$	30,000,000
Net operating income	$	700,000	$	2,700,000
Average operating assets	$	2,000,000	$	15,000,000

Required:

1.

For each division, compute the return on investment (ROI) in terms of margin and turnover. (Do not round intermediate calculations. Enter your answers as a percent (i.e., 0.12 should be entered as 12).)

2.

Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division.

	Osaka	Yokohama
Average operating assets	$2,000,000	$15,000,000
Net operating income	300,000	2,250,000
Minimum required return on average assets
Residual income	$300,000	$2,250,000