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Megatronics Corporation, a massive retaler 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 retaler of electronic products, is organized in four separate divisions. The four divisional managers are evaluated at year-end, and bonuses are warded based on ROL Last year, the company as a whole produced a 15 percent return on its investment. During the past week, management of the company's Northeast Division was approached about the possibility of buying a competitor that had decided to redirect its ret t es the competitor is acquired, it will be acredits book wae) The water flow relate to recent performance of the Northeast Division and the competitor titor Variable sota 758 of sales 856,000 Tot of sale 900.000 Invested capital Management has determined that in order to upgrade the compet capital would be needed tronics standards, an additional $120.000 of invested 1. Compute the current ROI of the Northeast Division and the division's Ron the competitor is acquired 2. divisional management is being evaluated on the basis of ROLw the Northeast M onkey pure cuisition of the competitor? 3a Compute the ROI of the competitor as is now and her the intended upgrade 3-5. I ROI is used as the basis for evaluation would Megatronics Corporation they be in favor of the acquisition of the competitor? 4. Calculate the Northeast Division's ROI afer acquisition of competitor but before upgrading S-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 of the competitoris acquired. 5- divisional management is being evaluated on the base of residual income, will the Northeast Divisionely pre the competitor? Complete this question by entering your answers in the tabs below, Regt Reg DA Rese Compute the current Rot of the Northeast Division and the division's ROI the competitor answer to 2 decimal places (1,1234 should be entered as 12.34):) DRO ROLE

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