Presented below is selected information for three regional divisions of Medina Company.

		Divisions
		North			West			South
Contribution margin		$299,000			$499,100			$400,800
Controllable margin		$139,500			$361,100			$208,500
Average operating assets		$930,000			$1,570,000			$1,390,000
Minimum rate of return		13	%		14	%		8	%

Compute the return on investment for each division.

North Division			%
West Division			%
South Division			%

LINK TO TEXT

Compute the residual income for each division.

North Division		$
West Division		$
South Division		$

LINK TO TEXT

Assume that each division has an investment opportunity that would provide a rate of return of 16%.

(1)		If ROI is used to measure performance, which division or divisions will probably make the additional investment? NorthSouthWestNorth and SouthNorth and WestSouth and WestNorth, South and West
(2)		If residual income is used to measure performance, which division or divisions will probably make the additional investment? NorthSouthWestNorth and SouthNorth and WestSouth and WestNorth, South and West