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 $ 600,000 145 Division B $ 14,000,000 $ 7.000.000 $ 560,000 105 Division C $ 25,000,000 $ 5,000,000 $ 800,000 168 Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 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 the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req 3A Req 3B Compute the margin, turnover, and return on investment (ROI) for each division. (Do not round intermediate calculations. Round your answers to 1 decimal place.) ROI Margin Turnover Division A % Division B 1 Division C % % % Req2 > $ 3,000,000 $ 600,000 148 Average operating assets Net operating income Minimum required rate of return $ 7,000,000 $ 560,000 10$ $ 5 $ Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that wou a. If performance is being measured by ROI, which division or divisions will probab b. If performance is being measured by residual income, which division or divisions Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req Req 3B Compute the residual income for each division. (Loss amounts should be indicated by Division A Division B Division C Residual income (loss) 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 the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Req1 Reg 2 Req 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 the opportunity? Division A Division B Division C 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 the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept the opportunity? Complete this question by entering your answers in the tabs below. Req 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 residual income, which division or divisions will probably accept the opportunity? Division A Division B Division C
