ROI and Residual Income: Basic Computations Watkins Associated Industries is a privately held conglomerate. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 15%. Selected operating data for three of the divisions of the company follow. Trucking Division Seafood Division Construction Division Sales Operating assets Net operating income $6,450,000 3,750,000 $1,845,000 580,000 525,000 116,000 $5,200,000 1,750,000 385,000 (a) Compute the return on investment for each division. (Round answers to three decimal places.) Trucking ROI = Seafood ROI = 0 x 0 x Construction ROI = 0 x (b) Compute the residual income for each division. Note: Use a negative sign if residual income is a loss. Residual income Net operating income $ Trucking Seafood Construction 0 x $ 0 x $ 0 x Minimum level 0 x 0 x 0 x Residual income $ 0 x $ 0 * $ 0 x