Exercise 10-8 Computing and Interpreting Return on Investment (ROI) [LO10-1]

Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below:

	Division
	Queensland		New South Wales
Sales	$	928,000	$	1,479,000
Average operating assets	$	580,000	$	493,000
Net operating income	$	74,240	$	73,950
Property, plant, and equipment (net)	$	243,000	$	193,000

Required:

1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover.

2. Which divisional manager seems to be doing the better job?

Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. (Do not round intermediate calculations. Round your answers to 2 decimal places.)