Munoz Technologies, Inc. has three divisions. Munoz has a desired rate of return of 12.5 percent. The operating assets and income for each division are as follows:

Divisions	Operating Assets				Operating Income
Printer	$	640,000			$	105,600
Copier		910,000				100,100
Fax		460,000				63,940
Total	$	2,010,000			$	269,640

Munoz headquarters has $130,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROIs:

	Expected ROIs for
Divisions	Additional Investments
Printer	14.0	%
Copier	13.0	%
Fax	12.0	%

Required

a-1. Calculate the ROI for each division.

a-2. Which division manager is currently producing the highest ROI?

b. Based on ROI, which division manager would be most eager to accept the $130,000 of investment funds?

c. Based on ROI, which division manager would be least likely to accept the $130,000 of investment funds?

d. Which division offers the best investment opportunity for Munoz?

g. Calculate the residual income:

(1) At the corporate (headquarters) level before the additional investment.

(2) At the division level before the additional investment.

(3) At the investment level.

(4) At the division level after the additional investment.

Calculate the ROI for each division. (Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4)

	ROI
Printer Division		%
Copier Division		%
Fax Division		%

Calculate the residual income at the corporate (headquarters) level before the additional investment.

Residual income

Calculate the residual income: (Loss amounts should be indicated by a minus sign.)

(2) At the division level before the additional investment. (3) At the investment level. (4) At the division level after the additional investment.

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		Residual Income (loss)
(2)	Printer division
	Copier division
	Fax division
(3)	Printer division
	Copier division
	Fax division
(4)	Printer division
	Copier division
	Fax division