Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Megamart provides the following information on its two investment centers. Investment Center Electronics Sporting goods Sales $ 41,520,000 18,088,000 Income $ 3, 114,000 2,261,000 Average Assets $ 17,300,000 13,300,000 Exercise 9-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted? The target return is 11%. Exercise 9-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted? The target return is 11%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? = Return on Investment Numerator: I Denominator: 1 Electronics 1 Sporting Goods 1 Which center is most efficient at using assets to generate income? Return on Investment 0 0 11 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? Sporting Goods Investment Center Electronics Income Less target income Residual income Which center generated the most residual income?