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Osaka $10,000,000 30,000,000 $700,000 $ 2,700.000 $ 2,000,000 15,000,000 Yokohama Sales Net operating income Average operating assets Required 1. For each division, compute the return

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Osaka $10,000,000 30,000,000 $700,000 $ 2,700.000 $ 2,000,000 15,000,000 Yokohama Sales Net operating income Average operating assets Required 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. (Do not round intermediate calculations) Osaka Yokohama ROI 35% 181% 2. Assume that the company evaluates performance using residual income and that the minimum required rate of retum for any division is 15%. Compute the residual income for each division. Osaka Yokohama Average operating assets Net operating income Minimum required return Residual income 3. Is Yokohama's greater amount of residual income an indication that it is better managed? O Yes O No

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