ROI and Residual Income:Basic Computations Watkins Associated Industries is a highly diversified company with three divisions: Trucking, Seafood, and Construction. 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 10 percent with a 30 percent tax rate. Selected operating data for three divisions of the company follow Sales Operating assets Net operating income Trucking Division Seafood Division Construction Division $900,000 330,000 62,000 $1,200,000 600,000 101,000 $780,000 260,000 60,000 (a) Compute the return on investment for each division. (Round answers to three decimal places.) Trucking ROI = Seafood ROI Construction ROI = (b) Compute the residual income for each division. Residual Incom Trucking Seafood Construction Net operating income $ Minimum level 0 X Residual income