Megatronics Corporation, a massive retaller ofelectrohic 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 company's Western Division was approached about the possibility of buying a competitor that had decided to redirect its retail activities. (If the competitor is acquired, it will be acquired at its book value.) The data that follow relate to recent performance of the Western Division and the competitor: Western Division Competitor Sales Variable costs Fixed costs $4,210,000 70 $1,074,000 2,610,000 60 $ 968,000 %of sales %of sales Invested capital $ 900,000 $ 304,000 Management has determined that in order to upgrade the competitor to Megatronics standards, an additional $171,000 of invested capital would be needed Problem 13-40 Part 3 3-a. Compute the ROl of the competitor as it is now and after the intended upgrade (Round your ROI to 2 decimal places (i.e., .1234 should be entered as 12.34).) ROI before upgrading ROI after upgrading | 22.00 % 25.00 3-b. If ROl is used as the basis for evaluation, would Megatronics Corporation likely be in favor of the acquisition of the competitor? No Yes, but only without upgrading Yes, even with upgrading