Question: Hi , can please show the right answer and steps Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (L010-1,




Exercise 10-12 (Algo) Evaluating New Investments Using Return on Investment (ROI) and Residual Income (L010-1, LO10-2) ped 16 Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division Division 3 Division Sales $ 12,360,000 $ 14,420,000 $ 25,750,000 Average operating assets $ 3,090,000 $ 7,210,000 $ 5,150,000 Net operating income $ 618,000 $ 576,800 $ 824,000 Minimum required rate of return 140 100 Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover 2. Compute the residual income (loss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 15% rate of return a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? ok Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3A Reg 38 Assume that each division is presented with an investment opportunity that would yield a 15% rate of return. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Division A Division B Division Req1 Req 2 Req Reg 3B Compute the return on investment (ROI) for each division using the formula stated i round intermediate calculations. Round your answers to 1 decimal place.) Margin Turnover ROI de Division A Division B Division C % % % % % % Reg 1 Req 2 > Req 1 Req 2 Req Req 3B Compute the residual income (loss) for each division. (Do not round intermediate calculations indicated by a minus sign.) Division A Division B Division C Residual income (loss) RO Ouest THB The Nortxxx eduction commodo con external_brown nala.com Na W Welcome PPC 5050 A est - Extra Credit Selected stes and operating data for three divisions of different structural engineering firms ar DAN DISSO Division $ 12.360,000 1 14,470.000 5 25.750,000 Karapetin $ 1,090,000 1.210.000 + 3.150.000 Net operating tacone 3 610,000 3576.00 3824.000 Minime required rate of retur 10 16 Required 1 Compute the return on investment for each division using the formula stated in terms of 2 Compute the residual income foss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 15 a. performance is being measured by ROL which division or divisions will probably acceptor bir performance is being measured by residual income, which division or divisions will probably Complete this question by entering your answers in the tabs below. Moo2 38 Assume that can vision is presented with an investment oportunity that would yield a 15 is being mesured by ROL, which division or divisions will probably accestor neject the opportunity DIA Division cept Reject Rega Fay Prey 12 14 Next MacBook Pro > I'm
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