compute the roi of the pacific division before and after the competitors is acquired and explain Asia pacific division would accept the acquistion

content/2/TACC602-T19%2096202022-Final9%20Exam9%209628Main629620Paper.pdf 6 /6 100% + Question 5 (20 marks) Sunshine Industrial Ltd, a massive retailer of electronic products, is organised in four separate business divisions. The four divisional managers are evaluated at year end, and bonuses are awarded based on return on investment (ROD). Last year, the corporation as a whole achieved a ROI of 13%. During the past week, the divisional manager of the Asia Pacific Division was approached about the possibility of acquiring a competitor that had decided to redirect its retail activities. The following data relates to the recent performance of the Asia-Pacific Division and the competitor: Asia-Pacific Division Competitor Invested capital $1,850,000 $ 625.000 Sales $8,400,000 $5,200,000 Variable costs 70% of sales 65% of sales Fixed costs $2,150,090 $1,670,000 Management has determined that in order to upgrade the competitor to Sunshine's standards, an additional $375,000 of invested capital would be needed. Required: (a) Compute the ROI of the Asia Pacific Division for the following scenarios: (i) before the competitor is acquired. (ii) after the competitor is acquired. Explain, with reasons, whether the management of Asia Pacific Division would accept the acquisition (9 marks) (b) Do you think the corporate management (headquarters) of Sunshine would accept the acquisition? Show all computations to support your answer. OLON