North American Beverage Corporation is a highly innovative pacesetter in the changing soft drink industry. Following is financial data for each of the corporation three divisions: Division A Division B Division Sales $ 6,400,000 $ 10,400,000 $ 9,500,000 Average operating assets $ 1,600,000 $5,200,000 $ 2,375,000 Net operating income $ 352,000 $ 988,000 $ 261,250 Minimum required rate of return 18.00% 19.00% 15.ee Required: 1 Compute the return on investment (RO) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 19% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. if performance is being measured by residual income, which division or divisions will obably accept or reject the opportunity? Required: 1. Compute the return on investment (RO) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (oss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 19% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. if performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reqs Reg 2 Req 3A Req3B Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover Division A Division B Division ROI % 9 % Req Reg 2 > Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2 Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 19% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req: Reg 2 Reg 3A Reg 38 Compute the residual income (loss) for each division. (Do not round intermediate calculations. Loss amounts should be indicated by a minus sign.) Division A Division B Division Residual income (loss) Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 19% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req Req2 Req 3A Reg 38 Assume that each division is presented with an investment opportunity that would yield a 19% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C Required: 1 Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2 Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 19% rate of return a if performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Req 38 Assume that each division is presented with an investment opportunity that would yield a 19% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C
