RI. Photo Products, Inc., has three divisions—Digital, Film, and Video. (This is the same company as the previous exercises. This exercise can be assigned independently.) Segmented income statement information for the most recent fiscal year ended December 31 is shown as follows. Assume average operating assets totaled $15,000,000 for the Digital division, $6,500,000 for the Film division, and $17,500,000 for the Video division. Assume the cost of capital rate is 16 percent.
a. Calculate RI for each division.
b. What does RI tell us about each division?