Selected sales and operating data for three divisions of different structural engineering companies are given below:

	Division A			Division B			Division C
Sales	ps	12,840,000		ps	28,840,000		ps	26,050,000
average operating assets	ps	3,210,000		ps	7,210,000		ps	5,210,000
operating margin	ps	564,960		ps	346,080		ps	755,450
Minimum Required Rate of Return		6.00	%		6.50	%		14.50	%

Required:

1. Calculate the return on investment (ROI) for each division using the formula indicated in terms of margin and turnover.

2. Calculate the residual profit (loss) for each division.

3. Suppose each division is presented with an investment opportunity that would generate a 7% rate of return.

to. If performance is measured by ROI, which division or divisions are likely to accept or reject the opportunity?

b. If performance is measured by residual income, which division or divisions are likely to accept or reject the opportunity?