Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) reglons, as profit centers, The chief executive officer (CEO) evaluates divisional performance using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: The company operates three service depstments: the Dispatching Denartment, the Equipenent Management Department, and the Treasurer's Department. The Treasurer's Department and general corporate officers' salaries are not controliable by division manogement. The Dispatching Department manages the scheduling and releasing of completed trains. The Cquipment Manegement Department manoges the inventones of raitroad cars. It makes sure the night freight cars are at the right place at the right time. The Treasurer's Department conducts a variefy of services for tha company as a whole. The following additional information has been gatheredf 1. Prepare quarterly income statements showing income from operations for the three regions. Use three column headings: North, South, and West. Do not round your interim calculations. 2. What is the profit margin of each division? Round to one decimal place. Identify the most successful region according to the profit margin. 3. What would you include in a recommendation to the CEO for a better method for evaluating the performance of the divisions? a. The method used to evaluate the performance of the divisions should be reevaluated. b. A better divisional performance measure would be the rate of return on investment (income from operations divided by divisional assets). c. A better divisional performance measure would be the residual income (income from operations less a minimal return on divisional assets). d. None of these choices would be included. e. All of these cholces (a,b&c) would be included