Selected sales and operating data for three divisions of different structural engineering firms areg
Selected sales and operating data for three divisions of different structural engineering firms aregiven as follows: SalesAverage operating assetsNet operating incomeMinimum required rate of return Division A5,300,00$01,060,00$0$ 233,20013.00% Division BDivision C9,300,008,400,00$$004,650,001,680,00$$00$ 781,200$ 138,60016.80%10.00% Required:1. Compute the return on investment (ROI) for each division using the formula stated in terms of marginand turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate ofreturn.a. If performance is being measured by ROI, which division or divisions will probably accept or rejectthe opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity?
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