The following excerpt is from Coca-Cola Company€™s 2009 annual report filed with the SEC. Management evaluates the performance of our operating segments separately to individually monitor the different factors affecting financial performance. Our Company manages income taxes and financial costs, such as interest income and expense, on a global basis within the Corporate operating segment. We evaluate segment performance based on income or loss before income taxes. Below are selected segment data for Coca-Cola Company for the 2009 and 2008 fiscal years. Dollar amounts are in millions.

Required
a. Compute the ROI for each of Coke€™s geographical segments for each fiscal year.
b. Assuming Coke€™s management expects a minimum return of 30%, calculate the residual income for each segment for each fiscal year.
c. Assume the management of Coke is considering a major expansion effort for the next five years. Write a brief memo that (1) explains which geographic segment you would recommend that Coke focus its expansion efforts, and (2) why the segment with the highest ROI is not the segment with the highest residualincome.

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Latin Eurasia 8 Africa North Europe America America Pac ific 2009 Fiscal Year Net operating revenues Income before taxes Identifiable operating assets $2,197 S3,203 S3,882 2,976 2,039 1155 3,047 2,480 8,271 SA,875 1,701 1,866 10,941 1,929 810 2008 Fiscal Year Net operating revenues Income before taxes Identifiable operating assets S2,327 S5,801 $3,835 S 8,280 S4,695 1,579 1,841 1,849 10,845 1,444 3,182 2,098 823 956