Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Net operating income Average operating assets Division Osaka $ 10,500,000 $630,000 $ 3,500,000 Yokohama $ 35,000,000 $ 2,800,000 $ 17,500,000 Required: 1. For each division, compute the return on investment (ROI). 2. Compute the residual income for each division assuming the company's minimum required rate of return is 15%. Complete this question by entering your answers in the tabs below.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 11E: The operating income and the amount of invested assets in each division of Conley Industries are as...
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Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions
follow:
Sales
Net operating income.
Average operating assets
Required 1
Required:
1. For each division, compute the return on investment (ROI).
2. Compute the residual income for each division assuming the company's minimum required rate of return is 15%.
Division
Complete this question by entering your answers in the tabs below.
Required 2
Residual income
Osaka
$ 10,500,000
$630,000
$ 3,500,000
Osaka
Yokohama
$ 35,000,000
$ 2,800,000
$ 17,500,000
Compute the residual income for each division assuming the company's minimum required rate of return is 15%.
Yokohama
< Required 1
Required 2 >
Transcribed Image Text:Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Net operating income. Average operating assets Required 1 Required: 1. For each division, compute the return on investment (ROI). 2. Compute the residual income for each division assuming the company's minimum required rate of return is 15%. Division Complete this question by entering your answers in the tabs below. Required 2 Residual income Osaka $ 10,500,000 $630,000 $ 3,500,000 Osaka Yokohama $ 35,000,000 $ 2,800,000 $ 17,500,000 Compute the residual income for each division assuming the company's minimum required rate of return is 15%. Yokohama < Required 1 Required 2 >
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