Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 6,900,000 $ 10,900,000 $ 10,000,000 Average operating assets $ 1,725,000 $ 5,450,000 $ 2,500,000 Net operating income $ 414,000 $ 1,090,000 $ 325,000 Minimum required rate of return 19.00 % 20.00 % 16.00 %

Compute the residual income (loss) for each division. (Loss amounts should be indicated by a minus sign. Round your "Required rate of return" to 2 decimal places.)

	Division A		Division B		Division C
Average operating assets	$1,725,000		$5,450,000		$2,500,000
Required rate of return	19.00	%	20.00	%	16.00	%
Required operating income	$327,750		$1,090,000		$400,000
Actual operating income
Required operating income (above)
Residual income (loss)

Assume that each division is presented with an investment opportunity that would yield a 21% rate of return.

a.

If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? Division A Division B Division C 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