Brighton Holdings owns private companies and hires professional managers to run its companies. One company in Brighton Holdings portfolio is Sunder Properties. Sunder owns and operates apart- ment complexes, and has the following operating statement. SUNDER PROPERTIES (Last Fiscal Year) (Millions) Revenues $86.50 Expenses * (72.30) Net income before taxes $14.20 *Includes interest expense of $2.6 million. Brighton Holdings estimates Sunder Properties before-tax weighted average cost of capital to be 15 percent. Brighton Holdings rewards managers of their operating companies based on the oper- ating companys before-tax return on assets. (The higher the operating companys before-tax ROA, the more Sunder managers are paid.) Sunder Properties total assets at the end of last fiscal year are $64 million. Required: a. Calculate Sunders ROA last year. b. Sunder management is considering purchasing a new apartment complex called Valley View that has the following operating characteristics (millions $): Revenues $16.60 Expenses * $13.30 Total assets of new apartment $20.00 *Includes interest expense of $0.71. Will the managers of Sunder Properties purchase Valley View? c. If they had the same information about Valley View as Sunders management, would the shareholders of Brighton Holdings accept or reject the acquisition of Valley View in part ( b )? d. What advice would you offer the management team of Brighton Holdings?