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Megatronics Corporation, a massive retailer of electronic products, is organized in four separate divisions. The four divisional managers are evaluated at year-end, and bonuses are

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Megatronics Corporation, a massive retailer of electronic products, is organized in four separate divisions. The four divisional managers are evaluated at year-end, and bonuses are awarded based on ROL Last year, the company as a whole produced a 14 percent return on its investment During the past week, management of the companys Northeast Division was approached about the possiblity of buying a competitor that had decided to redirect its retail activities, (if the competitor is acquired, it will be acquired at its book relate to recent performance of the Northeast Division and the competitor Competit $2,760,e80 Sales Variable costs Fixed costs Invested capital $4,360,8e0 75% of sales 78% of sales $ 880,0ee $1,8e0,0e8 $ 737,0e9 $ 364,8e0 Management has determined that in order to upgrade capital would be needed the competitor to Megatronics' standards, an additional $204,750 of invested Required: 1. Compute the current ROI of the Northeast Division and the division's ROl if the competitor is acquired 2. If divisional management is being evaluated on the basis of ROI, will the Northeast Division likely pursue acquisition of the competitor? 3-o. Compute the ROI of the competitor as it is now and after the intended upgrade 3-b. If ROI is used as the basis for evaluation, wou 4. Calculate the Northeast Division's ROl after acquisition of competitor but before upgrading. 5-a. Assume that Megatronics uses residual income to evaluate performance and desires a 10 percent minimum return on invested capital Compute the current residual income of the Northeast Division and the division's residual income if the competitor is acquired. 5-b. f divisional management is being evaluated on the basis of residual income, will the Northeast Division likely pursue acquisition of competitor? ld Megatronics Corporation likely be in favor of the acquisition of the competitor? the Complete this question by entering your answers in the tabs below. Req 3A Req 4 Reg 5B Req 2 Req 38 Req 5A Req 1 Compute the current ROI of the Northeast to 2 decimal places (i.e. .1234 should be entered as 12.34).) Division and the division's Rot if the competitor is acquired. (Round your answers

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