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[The following information applies to the questions displayed below] Megamart provides the following information on its two investment centers. Investment Center Sales Electronics Sporting

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[The following information applies to the questions displayed below] Megamart provides the following information on its two investment centers. Investment Center Sales Electronics Sporting goods $ 39,840,000 25,200,000 Income $2,988,000 2,142,000 Average Assets $ 16,600,000 12,600,000 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 11%. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? Sporting Goods 2,142,000 (1.006,380) Investment Center Electronics Income S Less target income 2,088,000 $ (2.659.320) Residual income Which center generated the most residual income? Electronics

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