The following excerpt is from Coca-Cola Company's 2008 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 2008 and 2007 fiscal years. Dollar amounts are in millions.

Required
a. Compute the ROI for each of Coke's geographical segments for each fiscal year. Which segment appears to have the best performance during 2008 based on ROI? Which segment showed the most improvement from 2007 to 2008?
b. What factor seems most important in explaining why the ROI for North America is so much lower that the ROIs of other segments?
c. Assuming Coke's management expects a minimum return of 30 percent, calculate the residual income for each segment for each fiscal year. Which segment appears to have the best performance based on residual income? Which segment showed the most improvement from 2007 to 2008?
d. Explain why the segment with the highest ROI in 2008 is not the segment with the highest residual income .
e. Assume the management of Coke is considering a major expansion effort for the next five years. On which geographic segment would you recommend Coke focus its expansion efforts? Explain the rationale for your answer.

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Latin Eurasia & Europe North America Pacific Africa America 2008 Fiscal Year Net operating revenues Income before taxes Identifiable operating assets 2007 Fiscal Year Net operating revenues Income before taxes Identifiable operating assets $5,801 3,182 3,012 $2,327 $3,835 $ 8,280 S4,695 811 956 1,836 1,444 2,082 1,849 1,587 10,845 $3,244 1,752 S4,406 761 $2,109 696 1,023 $5,292 2,796 $ 7,836 1,665 10,510 2,997 1,989 1,468