Return on Investment and Residual Income The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20X5 reported the following results:

		North	South
Sales		$3,240,000	$2,740,000
Operating income		810,000	610,000
Taxable income		695,000	420,000
Investment		6,000,000	5,000,000

The company's desired rate of return is 10%. Income is defined as operating income.

a. What are the respective return-on-investment ratios for the North and South divisions?

Round ROI to the nearest whole percentage.

	ROI
North	Answer
South	Answer

b. What are the respective residual incomes of the North and South divisions?

	Residual Income
North	Answer
South	Answer

c. Which division has the better return on investment and which division has the better residual income figure?

Return on investment

AnswerNorthSouth

Residual income

AnswerNorthSouth