Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A $ 12,640,000 $ 3,160,000 $ 606,720 10. 00% Division B $ 35,800,000 $ 7,160,000 $ 608,600 Division C $ 20,640,000 $ 5,160,000 $ 577,920 11.20% Sales Average operating assets Net operating income Minimum required rate of return 10.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 11% rate of return. a. If performance is being 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. Reg 1 Req 2 Reg 3A Req 38 Compute the margin, turnover, and return on investment (ROI) for each division. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A % % Division B Division C % % % %

Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A $ 12,640,000 $ 3,160,000 $ 606,720 10. 00% Division B $ 35,800,000 $ 7,160,000 $ 608,600 Division C $ 20,640,000 $ 5,160,000 $ 577,920 11.20% Sales Average operating assets Net operating income Minimum required rate of return 10.50% Required: 1. Compute the margin, turnover, and return on investment (ROI) for each division. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 11% rate of return. a. If performance is being 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. Reg 1 Req 2 Reg 3A Req 38 Compute the margin, turnover, and return on investment (ROI) for each division. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin Turnover ROI Division A % % Division B Division C % % % %

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter14: Decentralized Operations

Section: Chapter Questions

Problem 14.5.2P

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