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Presented below is selected information for three regional divisions of Swifty Company. North Contribution margin $300,000 Controllable margin $139,500 Average operating assets $930,000 Minimum rate
Presented below is selected information for three regional divisions of Swifty Company. North Contribution margin $300,000 Controllable margin $139,500 Average operating assets $930,000 Minimum rate of return 11 % Divisions West $500,000 $360,800 $1,640,000 15 % South $399,300 $210,000 $1,400,000 9% Compute the return on investment for each division. North Division % West Division % South Division % Compute the residual income for each division. North Division $ West Division $ South Division $ eTextbook and Media 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
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