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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division Sales $ 12,600,000

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Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division Sales $ 12,600,000 $ 14,700,000 $ 26,250,000 Average operating assets $ 3,150,000 $ 7,350,000 $ 5,250,000 Net operating income $ 630,000 $ 588,000 $ 840,000 Minimum required rate of return 14 100 168 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 36 Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. (Do not round intermediate calculations. Round your answers to 1 decimal place.) Margin Turnover ROI Division A % % Division B % % Division C % % Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg BA 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 Complete this question by entering your answers in the tabs below. Req1 Reg 2 Req Req 3B 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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