The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20X5 reported the following results:     North South Sales   $3,720,000 $3,220,000 Operating income   930,000 730,000 Taxable income   785,000 510,000 Investment   6,000,000 5,000,000 The company's desired rate of return is 10%. Income is defined as operating income. a. What are the respective return-on-investment ratios for the North and South divisions? Round ROI to the nearest whole percentage. North: Answer  South: Answer  b. What are the respective residual incomes of the North and South divisions? North: Answer  South: Answer  c. Which division has the better return on investment and which division has the better residual income figure? Return on investment: Answer  Residual Income: Answer

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20X5 reported the following results:

    North South
Sales   $3,720,000 $3,220,000
Operating income   930,000 730,000
Taxable income   785,000 510,000
Investment   6,000,000 5,000,000

The company's desired rate of return is 10%. Income is defined as operating income.

a. What are the respective return-on-investment ratios for the North and South divisions?

Round ROI to the nearest whole percentage.

North: Answer 

South: Answer 

b. What are the respective residual incomes of the North and South divisions?

North: Answer 

South: Answer 

c. Which division has the better return on investment and which division has the better residual income figure?

Return on investment: Answer 

Residual Income: Answer 

 

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It says that step a is wrong. That those are not the right ROI's. Is there another way to solve that section?

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