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Required information [The following information applies to the questions displayed below.] Megamart provides the following information on its two investment centers. Investment Center Electronics Sporting goods Sales $ 40,800,000 17,680,000 Income $ 3,060,000 2,210,000 Average Assets $ 17,000,000 13,000,000 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 11%. Required information Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? Return on Investment 1 Denominator: Numerator: Return on Investment 1 Electronics 1 Sporting Goods 1 Which center is most efficient at using assets to generate income? RE Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume a target income of 11% of average assets. Compute residual income for each center. Which center generated the most residual income? Investment Center Electronics Sporting Goods Income Less target income Residual income Which center generated the most residual income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume the Electronics center is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted? The target return is 11%. Should the new investment opportunity be accepted? Complete this question by entering your answers in the tabs below. Profit Margin Investment Turnover Compute investment turnover for each center. Which department is most efficient at generating sales from average invested assets? Investment Turnover Numerator: Denominator: Investment Turnover Investment Center 1 Electronics 1 Sporting Goods Which department is most efficient at generating sales from average invested assets? 5 Profit Margin

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