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Presented below is selected information for three regional divisions of Medina Company. Divisions North West South Contribution margin $299,100 $501,000 $399,000 Controllable margin $139,500
Presented below is selected information for three regional divisions of Medina Company. Divisions North West South Contribution margin $299,100 $501,000 $399,000 Controllable margin $139,500 $362,000 $208,500 Average operating assets $930,000 $1,810,000 $1,390,000 Minimum rate of return 13 % 15 % 9 % Compute the return on investment for each division. (Round ROI to 0 decimal places, e.g. 15.) North Division % West Division % South Division % Compute the residual income for each division. (Round final answers to 0 decimal places, e.g. 1,255.) North Division $ West Division $ South Division North 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? (2) If residual income is used to measure performance, which division or divisions will probably make the additional investment? South West North and South North and West South and West North, South and West
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