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Dubois Garage Doors (DGD) Ltd., has two divisions-Doors and Electronic Components, which operate in a decentralized manner. The financial information of each division is shown

Dubois Garage Doors (DGD) Ltd., has two divisions-Doors and Electronic Components, which operate in a decentralized manner. The financial information of each division is shown as follows: Doors Electric Components $1,200,000 $2,550,000 Sales Variable Costs: Direct Materials 192,000 331,500 Direct Labour 408,000 790,500 Variable Overhead 120,000 204,000 Total Variable Costs: 720,000 1,326,000 Contribution Margin 480,000 1,224,000 Fixed Overhead (excluding interest expenses) 180,000 357,000 Operating Income (EBIT) 300,000 867,000 Total Assets $952,000 $3,020,000 Current Liabilities 190,400 906,000 Debt: Equity 3:2 1:1 Cost of Debt 11 % 10 % Cost of Equity 14 % 11 % Tax Rate 30 % 40 % The manager of the Electronic Components has an opportunity to invest in a new machine costing $560,000 with a useful life of 5 years. The new machine will have no residual value at the end of the 5th year. The new machine will be able to reduce the direct materials and direct labour by 10% and variable overhead by 5%. The existing machine was purchased 5 years ago for $448,000, and can last for another 5 years with no residual value in 5 years' time. If the new machine is purchased, the existing machine can be sold for $46,000. The new machine will be financed through debt and equity with the same current capital structure, and the same cost of debt and equity in the Electronic Components division. (a) Calculate each division's ROI, RI, and EVA. (Round ROI and WACC calculations to 2 decimal places, e.g. 15.26%. Round RI and EVA to O decimal places, e.g. 125.) ROI RI $ EVA Doors % $ $ $ Save for Later Electric Components % Calculate each division's ROI, RI, and EVA. (Round ROI and WACC calculations to 2 decimal places, e.g. 15.26%. Round RI and EVA to 0 decimal places, e.g. 125.) ROI RI EVA $ Doors % $ Electric Components % Calculate the net present value for the new investment project for the Electronic Components division, using the WACC as the discount rate. (Round present value factor calculations to 4 decimal plac and final answer to 0 decimal places, e.g. 125. Enter negative amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net present value Calculate the ROI, RI, and EVA for the new investment project, using the WACC for the investment. (Round ROI and WACC calculations to 2 decimal places, e.g. 15.26%. Round RI and EVA to 0 d e.g. 125.) ROI RI EVA $ %

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