PA10-3 Evaluating Managerial Performance, Proposed Project Impact on Return on Investment, Residual Income [LO 10-4, 10-5] Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Division A Division B Division C Sales revenue $ 1,295,000 $ 1,072,000 $ 1,074,000 Cost of goods sold 800,000 787,000 780,000 Miscellaneous operating expenses 72,000 60,000 61,000 Interest and taxes 56,000 49,000 49,000 Average invested assets 9,684,000 2,306,000 3,793,000 Wescott is considering an expansion project in the upcoming year that will cost $5.8 million and return $532,000 per year. The project would be implemented by only one of the three divisions. Required: 1. Compute the ROI for each division. (Do not round your intermediate calculations. Round your percentage answer to 2 decimal places, (i.e. 0.1234 should be entered as 12.34%.)) 2. Compute the residual income for each division. (Loss amounts should be indicated by a minus sign.) 3. Rank the divisions according to the ROI and residual income of each. 4-a. Compute the return on investment on the proposed expansion project. (Round your percentage answer to 2 decimal places, (i.e. 0.1234 should be entered as 12.34%.)) 4-b. Is this an acceptable project? Yes No 5. Without any additional calculations, state whether the proposed project would increase or decrease each divisions ROI. 6. Compute the new ROI and residual income for each division if the project was implemented within that division. (Loss amounts should be entered with a minus sign. Enter your ROI percentage answers to 2 decimal places, (i.e., 0.1234 should be entered as 12.34%.))