Exercise $11-14($Algo$)$ Evaluating New Investments Using Return on Investment $($ROI$)$ and

Residual Income $[$LO$11-1,$ LO$11-2]$

Selected sales and operating data for three divisions of different structural engineering firms are given as follows:

Requlred:

Compute the margin, turnover, and return on Investment $($ROI$)$ for each division.

Compute the residual Income $($loss$)$ for each division.

Assume that each division is presented with an Investment opportunity that would yleld a $10\%$ rate of return.

a$.$ If performance is belng measured by ROI, which division or divisions will probably accept the opportunity?

b$.$ If performance is being measured by residual Income, which division or divisions will probably accept the

opportunity?

Complete this question by entering your answers in the tabs below.

Req $2$

Compute the residual income $($loss$)$ for each division. $($Do not round intermediate calculations. Loss amounts should be

indicated by a minus sign.$)$