chapter 14.

please answer A and B

Exercise 14-32 (Algo) Comparing Business Units Using Residual Income (LO 14-3) Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for revenues, costs, and assets in their respective regions. The firm is highly decentralized and managers are evaluated solely on divisional performance. Corporate overhead (all fixed) is allocated to the regions based on regional gross margin (regional revenue minus regional cost of sales). The following information is from Lauderdale's first year of operations: Information on the division assets in the three regions of Lauderdale Corporation follows: Lauderdale Corporation has a cost of capital of 8.6 percent. Required: a. Compute residual income for the three regions. Ignore taxes. b. How have these regions performed? Complete this question by entering your answers in the tabs below