Is yokohamas greater residual income an indication that he

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Reference no: EM13990527

Mejii isetan corp of Japan has 2 regional divisions with HQ in osaka and yokohama.

The data of the two divisions is as below

 

Osaka

Yokohama

Sales

10500000

35000000

Net operating Income

630000

2800000

Average operating assets

3500000

17500000

Required

1. For each division , comnpute the return on investment in terms of margin and turnover.

2. Assume tht the company evaluates performance using residual income and that the rate of return for any division is 15%, Compute the residual income for each division.

3. Is yokohama's greater residual income an indication that he is better managed.

Reference no: EM13990527

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