Exercise 10-8 ROI and Investment Decisions Refer to Exercise 10-7 for data. At the end of Year 2, the manager of the Canned Foods Division is concerned about the division's performance. As a result, he is considering the opportunity to invest in two independent projects. The first is juice boxes for elementary school chij. dren. The second is fruit and veggie pouches for kids on the go. Without the investments, the division expects that Year 2 data will remain unchanged. The expected operating incomes and the outlay reauired for each investment are as follows: Allard's corporate headquarters has made available up to \$ IUU,UUU of capital for this divi. sion. Any funds not invested by the division will be retained by headquarters and invested to earn the company's minimum required rate of return, 9 percent. Required: 1. Compute the ROI for each investment. 2. Compute the divisional ROI (rounded to four significant digits) for each of the following four alternatives: a. The juice box is added. b. The fruit pouch is added. c. Both investments are added. d. Neither investment is made; the status quo is maintained. Assuming that divisional managers are evaluated and rewarded on the basis of ROI performance, which alternative do you think the divisional manager will choose? 3. Which of the data analytic types - descriptive, diagnostic, predictive or prescriptive-is used in determining which, if any, new investment to make? Explain. (See Exhibits 2.5 and 2.6, pp. 37,40 , for a review of data analytic types.) Which alternative will the division manager likely choose? 3. Data analytics will be used in what manner to determine which investment is more profitable to the company