Q$.3$ Presented below is selected information for three regional divisions of Ciutat Company.

Divisions

$$ Required $>$

Compute the return on investment for each division.

Compute the residual income for each division.

Assume that each division has an investment opportunity that would provide a rate of

return of $22\%.$

$(1)$ If ROI is used to measure performance, which division or divisions will probably

make the additional investment?

$(2)$ If residual income is used to measure performance, which division or divisions will

probably make the additional investment?