Three divisions of Jameson Co$.$ report the following sales and operating data:

Fitness Training

Spa Services

Athletic

Hear

$$650,000$

Sales Average operating assets

$$540,000$

$$100,000$

$$790,000$ $$158,000$

$$130,000$

Operating income

Minimum required rate of return

$$27,000$

$143$

$139,50016\%$

$ $39,000$

$14\%$

$1.$ Compute the ROI for each division, using the formula stated in in terms of margin and turnover.

ROI

Required:

Fitness training

Spa services

Athletic wear

$2.$ Compute the residual income for each division.

Fitness Training

Spa Services

Athletic Wear

Residual income

$3.$ Assume that each division is presented with an investment opportunity that would yield a rate of return of $26\%.$

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

Fitness Training

Spa Services

Athletic Wear

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

Fitness Training

Spa Services

Athletic Wear