Megamart provides the following information on its two investment centers.

1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income?
2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income?
3. Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 12%.

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Investment Center Sales Income Average Assets Electronics........ $40,000,000 $2,880,000 $16,000,000 Sporting Goods..... 20,000,000 2,040,000 12,000,000