Drawing Ltd is a major producer of prefabricated beach houses. The company consists of two divisions: Bondi division and Bronte division. Bondi division's annual performance report follows. It forms the basis of the evaluation of the division and its management. Balance sheet as at 31 December Current year Last year Assets: Current Assets $800,000 $650,000 Fixed Assets $915,000 $905,000 Total Assets $1,715,000 $1,555,000 Liabilities: Current Liabilities $450,000 $800,000 Long term Liabilities $1,265,000 $755,000 Total Liabilities $1,715,000 $1,555,000 Performance report for the year ending 31 December Last year $950,000 $550,250 $399,750 $70,200 $329,550 Current year Sales Revenue: $850,000 Variable Costs $505,250 Contribution Margin $344,750 Less: Controllable Fixed Expenses $60,500 Profit Margin Controllable by $284,250 Divisional Manager Less: Traceable Fixed Expenses $ 135,000 Profit Margin Traceable to $149,250 Division Less: Common Fixed Expenses $50,000 Net Profit Before Tax $99,250 Corporate Tax (20%). $19,850 Profit After Tax $79,400 The minimum required rate of return is 20% $95,500 $234,050 $50,000 $184,050 $36,810 $147,240 The Bondi division has the opportunity to add a new product line that would require an additional investment in operating assets of $500,000. The cost and revenue characteristics of the new product line per year would be: Sales $1000,000 Variable cost 60% of sales Controllable Fixed Expenses $120,000 Traceable Fixed Expenses $50,000 Required: (Total Marks: 15) (i) Calculate the ROI (return on investment) of the Bondi division to evaluate "divisional manager's performance" for the current year and comment on the manager's performance. Show your calculations. (2 marks) (ii) Calculate the ROI of the Bondi division to evaluate divisional performance for the last year and comment on divisional performance. Show your calculations. (2 marks) (iii) Calculate the RI (residual income) of the Bondi division to evaluate the divisional manager's performance" for the current year and comment on the manager's performance. Show your calculations. (2 marks) (iv) Calculate the Rl of the Bondi division to evaluate "divisional performance" for the last year and comment on divisional performance. Show your calculations. (2 marks) (v) Calculate the ROI of the Bondi division with the new product line for the current year and recommend whether the divisional manager should undertake the new product line. Show all calculations and give one (1) reason for your recommendation. (3 marks) (vi) Discuss the merits of Drawing Ltd using Economic value added (EVA) to manage organisational performance. (4 marks)