Chowder Lane Ltd has two profit centres: a grocery store based in Newmarket, Ontario, and

a second store based in Welland, Ontario. Consider the following data.

Newmarket, Ontario

Welland, Ontario

Average Operating Assets

$$337,500,000$

$$405,625,000$

Current Liabilities

$5,900,000$

$$8,700,000$

Operating Income

$8,910,000$

$8,112,500$

Total Capital Employed

$148,500,000$

$162,250,000$

Minimum Required Rate of Return

$2\mathrm{.}5\%$

$2\mathrm{.}5\%$

a$)$

Calculate the return on investment $($ROI$)$ for each division $(4$ marks$)$

b$)$

Based on the ROI calculated in part $($a$),$ which division is more profitable and why? $(2$ marks$)$

c$)$

Calculate the residual income $($RI$)$ for each division $(4$ marks$)$

d$)$

Based on the RI calculated in part $($c$),$ which division has a better RI and why? $(2$ marks$)$

Please provide step by step answer