3. Trimble Ltd. is a decentralised organisation with seven autonomous production Divisions. The company wishes to maximise its return on invested assets, with year- end bonuses given to the teams working in the Divisions with the highest Return on Investment results. Operating results for the company's Crushing Machines Division for the most recent year are given as follow; Sales Less variable expenses Contribution margin Less fixed expenses Net operating profit 6,000,000 3,750,000 2,250,000 900,000 1,350,000 The Crushing Machines Division had operating assets valued at 9,250,000 at the end of the year. Trimble Ltd. had an aggregate Return on Investment of 10% across all of its productive Divisions. The Crushing Machines Division has an opportunity to add a new product line that would require an additional investment in operating assets of 4,250,000. The sales from the new product are expected to be 2,500,000 per annum with variable expenses of 45% and fixed expenses of 850,000 each year. Required; a) Calculate the Crushing Machines Division's ROI for the most recent year. (2 marks) b) Calculate the Crushing Machines Division's ROI if it adopts the new product. (2 marks) c) What behavioural problem is created by the situation outlined in the question? You should explain carefully the reasons why a problem exists from the perspective of the company as a whole as well as the various pressures faced by the manager of the Crushing Machines Division. (11 marks) d) How could Trimble Ltd. remove the behavioural problem that you identified in your answer to (c)? Assuming that the required rate of return for Trimble Ltd. is 10% you should demonstrate quantitatively how your answer resolves the problem. (8 marks) e) What additional behavioural issues would be raised if the Crushing Machines Division had to pay a transfer price to the Loading Machines Division for a component, and how might these issues be resolved by the company as a whole? (10 marks) TOTAL 33 MARKS