Which of the following statements is true?
suppose a company evaluates divisional performance using both roi and residual income. the company's minimum required rate of return for the purposes of residual income calculations is 12%.
1. if a division has a residual income of $6,000, then its roi is less than 12%.
2. if a company contains a number of investment centers of differing sizes, return on investment (roi) should be used rather than residual income to rank the financial performance of the divisions.
3. roi and residual income are tools used to evaluate managerial performance in investment centers.

a. both statements 1 and 3 are true.
b. both statements 2 and 3 are true.
c. all of the statements are true.
d. none of the statements are true.