Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions
follow:
Division
Osaka
Yokohama
Sales
$ 9,600,000
$ 26,000,000
Net operating income
$ 672,000
$ 2,340,000
Average operating assets
$ 3,200,000
$ 13,000,000
Required:
1. For each division, compute the return on investment (ROI).
2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any
division is 16%. Compute the residual income for each division.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
For each division, compute the return on investment (ROI).
ROI
Osaka
Yokohama
%