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 $ 5,500,000 $ 1,100,000 $ 253,000 15.00% Division B $ 9,500,000 $ 4,750,000 $ 817,000 17.20% Division C $ 8,600,000 $1,720,000 $ 159, 100 12.00% 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 17% 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 Req 38 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 2 decimal places.) Margin Turnover ROI Division A Division B Division 1% 1 % Reg 2 > Sales Average operating assets Net operating income Minimum required rate of return Division A $ 5,500,000 $ 1,100,000 $ 253, 000 15.00 Division B $9,500,000 $4,750,000 $ 817,000 17.20 Division C $ 8,600,000 $1,720,000 $ 159, 100 12.00 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 17% rate a a. If performance is being measured by ROI, which division or divisions will probably accept or reject th b. If performance is being measured by residual income, which division or divisions will probably accep Complete this question by entering your answers in the tabs below. Req1 Req2 Reg 3A Reg 38 Compute the residual income (loss) for each division. (Do not round Intermediate calculations. Loss amount indicated by a minus sign.) division Division A Division B Division Residual income (loss) 1 of 1 !! Next MacBook Air Sales Average operating assets Net operating income Minimum required rate of return $ 5,500,000 $ 1,100,000 $ 253,200 15.00% $ 9,500,000 $ 4,750,000 $ 817,000 17.20% $ 8,608,86 $ 1,720,08 $ 159, 10 12.0 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in ter 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a. If performance is being measured by ROI, which division or divisions will probably accep b. If performance is being measured by residual income, which division or divisions will pre Complete this question by entering your answers in the tabs below. Reg1 Reg 2 Req 3A Req 3B Assume that each division is presented with an investment opportunity that would yield a 17% is being measured by ROI, which division or divisions will probably accept or reject the opportu Division A Division B Division C Prev 1 of 1 !!! Next MacBook Air Minimun required rate of return 15.00% 17.20% 12.084 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 17% 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 op Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Req 3A Req 3B Assume that each division is presented with an investment opportunity that would yield a 17% 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
