Check my work 4 Meiji Isetan Corp. of Japan has two regional divisions with head

Question

Check my work 4 Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: 10 points Division Osaka Yokohama ? 11,000,000 40,000,000 $ 880,000 4,000,000 Average operating assets 2,750,000 20,000,000 Sales Net operating income eBook Hint Print References Required 1. For each division, compute the return on investment (ROI) 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 18%. 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 Required 1Required 2 Required3 For each division, compute the retu.Redured.sstment (ROI) in terms of margin and turnover. Osaka Yokohama ROI

Explanation / Answer

Calculate ROI :

Residual income :

Osaka = 880000-(2750000*18%) = 385000

Yokohama = 4000000-(20000000*18%) = 400000

No

Osaka Yokohama Margin 880000*100/11000000 = 8% 4000000*100/40000000 = 10% Turnover 11000000/2750000 = 4 40000000/20000000 = 2 ROI 8%*4 = 32% 10%*2 = 20%

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