Sales

Net operating income

Average operating assets

Osaka

$ 9,800,000

$ 588,000

$ 2,450,000

Yokohama

$ 28,000,000

$ 2,240,000

$ 14,000,000

Required:

1. For each division, compute the return on investment (ROl) in terms of margin and turnover.
2. 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.
3. Is Yokohama's greater amount of residual income an indication that it is better managed?

Complete this question by entering your answers in the tabs below.

Meil Isetan Corooration of Japan has two reional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions foliow Required: 1. For each division, compute the ieturn on investment (ROb in terms of margin and tumover 2. Assume that the comporvy cvaluotes performance using residual income and that the minimum required rate of return for any division 1s 14\% Compute the residuat income for each divion. 3. Is Yokohama's greotel amount of resicdual inkome an indication that it is better managed? Complete this question by eatering your answers in the tabs below. Eor each divleion, compute the retum on ievestment (ho1) in terne af margin and tumover division is 14%. Compute the residual income for each division. 3. Is Yokohama's greater amount of residual income an indication that it is better managed? Complete this question by entering your answers in the tabs below. 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