bonus.

Read the requirements.

Requirements

Calculate the ROI and residual income for each division of Isla Manufacturing, and briefly explain

which manager will get the bonus. What are the advantages and disadvantages of

each measure?

The CEO of Isla Manufacturing has recently heard of another measure similar to residual income

called EVA. The CEO has the accountant calculate adjusted incomes for clothing and cosmetics$,$

and finds that the adjusted after$-$tax operating incomes are $$773,500$ and $$1,582,400,$

respectively. Also, the clothing division has $$150,000$ of current liabilities, while the cosmetics

division has only $$110,000$ of current liabilities. Using the preceding information, calculate the

EVA for each division and discuss which division manager will get the bonus.

What nonfinancial measures could Isla use to evaluate divisional performances?

hanager will get the bonus. What are the advantages and disadvantages of each measure?