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

Division

Osaka Yokohama

Sales $ $10,500,000$ $ $35,000,000$

Net operating income $ $630,000$ $ $2,800,000$

Average operating assets $ $3,500,000$ $ $17,500,000$

Required:

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

$2.$ 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.

$3.$ Is Yokohama$$s greater amount of residual income an indication that it is better managed?