A big company is in need of additional funds. As an accountant, you are asked to help the company provide this information to potential investors based on the following data (Note: It is assumed that the rate of return this year is 21% and the cost of capital is 12.5%)

1. Calculate the ROI, Residual Income. and Economic Value Added for each Division (SHOW CALCULATION PROCESS).

2. Analyze the result!

3. Which division is most likely to attract potential investors?

INFORMATION Capital Investment Sales revenue Profit before tax Tax rate 35% Net Profit DEPARTMENT STORE 3,750,000,000 1,000,000,000 2,500,000,000 999,000,000 349,650,000 649,350,000 CONSTRUCTION 5,200,000,000 1,500,000,000 7,500,000,000 1,250,000,000 437,500,000 812,500,000 MANUFACTURE 7,500,000,000 3,500,000,000 100,000,000,000 45,000,000,000 15,750,000,000 29,250,000,000