Data follow for the Construction Division of D. Jack Inc.:

                                              Year 1                                Year 2

Sales                                      $ 52,000,000                    $ 57,750,000

Operating income                     7,280,000                        7,507,500

Average operating assets        200,000,000                     262,500,000

(Note: Round all answers to two decimal places.)

Required:

1. Compute the margin and turnover ratios for each year.

2. Compute the ROI for the Construction Division for each year.

The Tuxedo Division of Shamus O'Toole Company had operating income last year of $340,000 and average operating assets of $3,500,000. O'Toole's minimum acceptable rate of return is 7 percent. (Note: Round all answers to two decimal places.)

Required:

1. Calculate the residual income for the Tuxedo Division.

2. Was the ROI for the Tuxedo Division greater than, less than, or equal to 7 percent?