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:

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.

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

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