Exhibit 5 Divisional Returns Mei is trying to better understand the companys profits and where they come from. She used to calculate only return on investment (ROI) and residual income (RI) for the company as a whole. Based on the information she has from last year, she calculated an ROI of 13.3% and a RI of $200,000 for the waterpark. Mei would like you to drill down into these numbers further. The details of the information from the last year are:

Division Operating Income Average Assets Slides $800,000 $7,500,000 Food $200,000 $450,000 Merchandise $700,000 $2,550,000 Accommodation $300,000 $4,500,000 She used 12% as her required rate of return but there is a lot of volatility in the market so rates are fluctuating up and down by 2%. She would like to know how the results would look under ROI and RI if her required rate of return were to change. In addition, both the managers of the Slides and the Accommodation divisions feel their numbers may be unfavourable. The both argue that without slides and a place to stay, no one would buy food or merchandise, and therefore they should be judged by different rates of return. As you complete the quantitative analysis, consider what you might suggest to Mei and the division managers with regards to their relative performance.

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