The following info is provided for three operating divisions. The minimum accepted rate of return by the investor is 7%.

Division M N P

invested assets 14,000,000 25,000,000 50,000,000

sales 86,000,000 112,000,000 250,000,000

net income 840,000 1,750,000 6,000,000

Compute Return on Investment for:

a. Division M

b. Division N

c. Division P

Compute Residual Income for:

d. Division M

e. Division N

f. Division P

g. What division looks like the best division?