Homework Soved Exercise 11-12 Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO11-1, L011-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division Sales were operating assets operating income Minimum required rate of return Division A $ 12,480,000 $ 3.120,000 5 561,600 8.00 Division 5 211,000 $ 7,120,000 5 512,600 8.50 $ 20,480,000 $5,120,000 $ 532,400 10. 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 2. Assume that each division is presented with an investment opportunity that would yield a 9% rate of return a. I performance is being measured by ROI which division or divisions will probably accept or reject the opportunity? b. performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. A Hen Compute the return on investment on for each division using the formula stated in terms of margin and turnover. (Do not ROI 4 Average operating assets het operating income Minimum required rate of return $ 3,120,000 561,600 1.00% $ 7,120,00 $ 512,640 11.50% $5,120,00 532,480 10.40% ts Required: 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 9% rate of return a. I performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. I performance is being measured by tesidual income, which division or divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. G1 neg Reg30 Compute the return on westment (ROI) for each division using the formata stated in terms of margin and turnover (Do not un intermediate calculator Round your answers to 2 decimal places) Margin Turnover ROI DIA Don thuisono Reg 2 > LLO11-1, LO11-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Net operating income Minimum required rate of return Division A $ 12,480,000 $ 3,120,000 $ 561,600 8.00% Division 3 $ 28,480,000 $ 7,120,000 $ 512,640 8.50 Division $ 20,480,000 $ 5,120,000 $ 532,480 10.40% Required: 1. Compute the return on investment (RON 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 9% rate of retum I performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. W performance is being measured by residual income, which division of divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. Regt Red D) flegun Compute the residual income (los) for each division (Do not round intermediate calculations Losse amounts should be indicated by mission) Division Division Division du income Reg) [LO11-1, L011-2 Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets tet Operating income Minimum required rate of return Division A $ 12,480,000 $ 3,120,000 $ 561,600 3.00% Division Division $ 28,480,000 $20,400,000 $ 7,120,000 $ 5,120,000 $ 512,640 $ 532,480 8.50 10.40 Required: 1. Compute the return on investment (RON) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income oss for each division 3. Assume that each division is presented with an investment opportunity that would yield a 9% rate of return a. I 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? Complete this question by entering your answers in the tabs below. Beat fa 2 Reu Reg 3 Assume that each division is presented with an investment opportunity that would yield a rate of return. If performance is being mesured by ROI, which division or divisions will probably accept or reject the opportunity D Divison LO11-1, LO11-2) Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Sales Average operating assets Het operating income Minimum regeed rate of return Division $12,400,000 $3,120,000 $ 561,600 8.00% Division $ 28,450,000 $7.130,000 512,640 3.56% Division $ 20,450,000 $ 5,120.000 $ 532,480 10, 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 foss) for each division 3. Assume that each division is presented with an investment opportunity that would yield a 9% rate of retum Il performance is being measured by ROX, which division of divisions will probably accept or reject the opportunity? b. performance is being memured by residual income, which division of divisions will probably accept or reject the opportunity? Complete this question by entering your answers in the tabs below. NA Req3 me that each division is presented with an westment opportunity that would vild a rate of return, I performance being med by residual income, which division or divisions will probably accoot of reject the coportunity