Page 2 of 12 QUESTION 1 Gulfcoast Marine evaluates the performance of its two division managers using an ROI formula. For the forthcoming period, divisional estimates of relevant measures are: Power Boats Sailboats Total Company $12,000,000 $48,000,000 $60,000,000 Expenses 10,800,000 42,000,000 52,800,000 Divisional assets 10,000,000 30,000,000 40,000,000 Sales The managers of both operating divisions have the autonomy to make decisions regardin new investments. The manager of the Power Boats division is contemplating an investment in an additional asset that would generate an ROI of 14% and the manager the Sailboats division is considering an investment in an additional asset that would generate an ROI of 18%. Required: (i) Compute the projected ROI for each division disregarding the contemplated investments. (6 ma (ii) Based on your answer in part (i), which of the managers is likely to actually inve the additional assets under consideration? (3 m (iii) Are the outcomes of the investment decisions in part (ii) likely to be consistent overall corporate goals? Explain. (8 m (iv) If the company evaluated the division managers' performances using a income measure with a target return of 17%, would the outcomes of the inve decisions be different from those described in part (ii)? Explain