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Isla Manufacturing makes fashion products and competes on the basis of quality and leading-edge designs. The company has two divisions, clothing and cosmetics. Isla has
Isla Manufacturing makes fashion products and competes on the basis of quality and leading-edge designs. The company has two divisions, clothing and cosmetics. Isla has $3,125,000 invested in assets in its clothing division. After-tax operating income from sales of clothing this year is $500,000. The cosmetics division has $10,000,000 invested in assets and an after-tax operating income this year of $1,400,000. The weighted-average cost of capital for Isla is 12%. The CEO of Isla has told the manager of each division that the division that "performs best" this year will get a bonus Read the requirements Requirement 1. Calculate the ROl and residual income for each division of Isla Manufacturing, and briefly explain which manager will get the bonus. What are the advantages and disadvantages of each measure? Begin by selecting the formula to calculate ROI, then compute the ROI for each division. Measure of incomeMeasure of investment ROI 500,000 3,125,000 161 % Clothing Division Cosmetics Division Now select the formula to calculate RI, then compute the RI for each division 1,400,000 10,000,000 141% Measuure of income 500000 1650000 Imputed cost of investment 375000 1200000 Clothing Division 125000 450000 Cosmetics Division If Isla Manufacturing uses ROi, then the manager of the clothing division will get the bonus. If Isla Manufacturing uses Rl, then the manager of the cosmetics division will get the bonus. What are the advantages and disadvantages of each measure? First, match each measure with its advantage Choose from any list or enter any number in the input fields and then continue to the next
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