question 4

Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division Sales $ 12,570,000 $ 14,665,000 $ 26, 187,500 Average operating assets $ 3,142,500 $ 7,332,500 $ 5,237,500 Net operating income $ 628,500 $ 586,660 $ 838,000 Mininun required rate of return 145 18 161 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 15% 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. Regt Reg 2 Reg 3A Reg 30 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 1 decimal place.) Margin Turnover ROI Division Division B Division % % % % % Req2 >