Yellow Company has prepared the following information for three of its divisions: (Click the icon to view the data.) Requirements (a) Compute each division's return on investment and residual income, assuming a 10% cost of capital. (b) Suppose the net book value of each division's investments is half of the historical cost. Using net book value as the measure of investment, compute each division's return on investment and residual income, assuming a 10% cost of capital. (c) Comment on the division rankings in parts a and b. (d) If the division managers are rewarded on the basis of return on investment or residual income, will they find it attractive to invest in new, more costly equipment? Requirement (a) Compute each division's return on investment and residual income, assuming a 10% cost of capital. Begin with return on investment. Select the formula labels and calculate the return on investment for each division. (Enter the return on investment as a percent, rounded to two decimal places, X.XX%.) Division Division income X Y Cost of capital Return on investment Data table % HISTORICAL COST OF DIVISION OPERATING = % DIVISION INVESTMENTS INCOME % X $ 580,000 Y 7 550,000 370.000 $ 67,000 65,000 45.000 Z Now select the formula labels and calculate the residual income for each division. Division X Division income Y Z Cost of capital = Residual income = = Print Done - Requirement (b) Suppose the net book value of each division's investments is half of the historical cost. Using net Dook value as the measure or investment, compute each division's return on investment and residual income, assuming a 10% cost of capital. Regin with return on investment Select the formula lahale and calculate the ratum on investment for each division (Enter the return on investment ac a narrant rounded to hun decimal nlaree XXX%