Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division Division a Division Salen $ 12,000,000 $ 14,000,000 $ 25,000,000 Average operating assets $ 3,000,000 $ 7,000,000 $ 5,000,000 Net operating income $ 600,000 560,000 $ 800,000 Minimum required rate of return 140 109 164 Required: 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 (oss) 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. Reg 1 Reg 2 Req 3A Reg 38 Compute the residual Income (loss) for each division. (Loss amounts should be Indicated by a minus sign.) Division A Division B Division Residual income (100) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 12,000,000 $ 3,000,000 $ 600,000 141 Division 3 $ 14,000,000 $ 7,000,000 $ 560,000 104 Divisione $ 25,000,000 $5,000,000 $ 800,000 168 Required: 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. Reg 1 Reg 2 Req 3A Reg 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 Division C Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division Division 3 Division c Sales $ 12,000,000 $ 14,000,000 $ 25,000,000 Average operating annen $ 3,000,000 $ 7,000,000 $5,000,000 Net operating income $ 600,000 $ 560,000 $ 800,000 Minimum required rate of return 140 100 16 Required: 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. Req1 Reg 2 Req 3A Reg 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
