Three divisions of Jameson Co. report the following sales and operating data:

	Fitness Training			Spa Services			Athletic Wear
Sales	$	560,000		$	810,000		$	500,000
Average operating assets	$	112,000		$	162,000		$	100,000
Operating income	$	22,400		$	32,400		$	25,000
Minimum required rate of return		14	%		16	%		14	%

Required: 1. Compute the ROI for each division, using the formula stated in terms of margin and turnover.

2. Compute the residual income for each division.

3. Assume that each division is presented with an investment opportunity that would yield a rate of return of 21%.

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?

Three divisions of Jameson Co. report the following sales and operating data: Required: 1. Compute the ROI for each division, using the formula stated in terms of margin and turnover. 2. Compute the residual income for each division. 3. Assume that each division is presented with an investment opportunity that would yield a rate of return of 21%. 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? \begin{tabular}{|l|l|} \hline & \\ \hline Fitness Training & \\ \hline Spa Services & \\ \hline Athletic Wear & \\ \hline \end{tabular}