=+20-22 KK ROI, RI, EVA® OBJECTIVES 3, 4, 5 Sunshine Motorbikes Ltd operates a New Bike Division and a Used Bike Division. Some division financial measures for 2014 are as follows:

Chapter 20: Performance measurement, compensation and multinational considerations 785 M20_HORN3377_02_LT_C20.indd 785 2/09/13 4:07 PM

$ $150 000

$ $1 250 000 1

2 3

4 5

A B C New Bikes Used Bikes Total assets 25 000 000 Current liabilities 850 000 Operating profit $250 000 Required rate of return 8% 8%

$2 050 000 Division Division Required 1 Calculate return on investment (ROI) for each division using operating profit as a measure of income and total assets as a measure of investment.