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

	Division A			Division B			Division C
Sales	$	7,000,000		$	11,000,000		$	10,100,000
Average operating assets	$	1,750,000		$	5,500,000		$	2,525,000
Net operating income	$	427,000		$	1,111,000		$	338,350
Minimum required rate of return		20	%		20.2	%		17	%

Required:
1.	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 C	%		%

2.	Compute the residual income for each division. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)

	Division A	Division B	Division C
Residual income	$	$	$

3.	Assume that each division is presented with an investment opportunity that would yield a rate of return of 22%.

a.	If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity?

Division A	(Click to select)AcceptReject
Division B	(Click to select)RejectAccept
Division C	(Click to select)AcceptReject

b.	If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity?

Division A	(Click to select)AcceptReject
Division B	(Click to select)AcceptReject
Division C	(Click to select)AcceptReject