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Sales Average operating assets Net operating income Minimum required rate of return Required: Division A $ 12,330,000 $ 3,082,500 Division B $ 14,385,000 $
Sales Average operating assets Net operating income Minimum required rate of return Required: Division A $ 12,330,000 $ 3,082,500 Division B $ 14,385,000 $ 7,192,500 $616,500 $ 575,400 14% 10% Division C $ 25,687,500 $ 5,137,500 $ 822,000 16% 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req JA Req 38 Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Invision n Sales Average operating assets Net operating income Minimum required rate of return Required: Division A $ 12,330,000 $ 3,082,500 $ 616,500 14% Division B. $14,385,000 $ 7,192,500 Division C $ 25,687,500 $ 5,137,500 $ 575,400 $ 822,000 10% 16% 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the oppo Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3A Req[38 Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C
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