The following data pertain to three divisions of Calrisian Enterprises. The companys required rate of return on invested capital is 8 percent.

	Division I			Division II			Division III
Sales revenue	$	12,000,000			?			?
Income	$	2,050,000		$	500,000			?
Average investment	$	2,660,000			?			?
Sales margin		?			30	%		35	%
Capital turnover		?			2			?
ROI		?			?			40	%
Residual income		?			?		$	126,000

Required:

2.

Suppose Division IIs sales margin increased to 35 percent, while its capital turnover remained constant. Compute the divisions new ROI.

New return on investment

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