Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama....
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Accounting
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow:
Division Osaka Yokohama
Sales $9,300,000 $23,000,000
Net operating income $ 651,000 $2,070,000
Average operating assets $ 2,325,000 $11,500,000
Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover.
Osaka Yokohama
ROI %__?_ % __?__
Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 14%. Compute the residual income for each division.
Osaka/ Yokohama
Average operating assets ___?__
Net operating income____?____
Min. required return on assets ___?_
residual income ___?___
Is Yokohamas greater amount of residual income an indication that it is better managed?
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