Northern Pride Inc., a diversified company, operates four departments. The company has collected the following departmental information for 2016:

Instructions
(a) Rank the four departments based on their return on investment.
(b) Rank the four departments based on their residual income. Assume that the company requires a minimum return on the current investment of 10%.
(c) Explain why the rankings in part (a) and part (b) are similar or different.

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DepartmentSales Cost of Goods Sold $ 150,000 $ 200,000 90,000 1,500,000 1,250,000 Operating Expenses $ 15,000 23,500 195,000 276,000 Current Investment $ 175,000 210,000 1,100,000 1,400,000 35,000 1,173,000 750,000 4