Please answer the following questions below, thank you!!

1 Question 4-Performance Measurement (8 marks) The president feels very strongly that Mountain Sports should expand operations to a second location. She has even found a prime location in Canmore, Alberta, One of the great things about Canmore is its promity to the mountains, and its only about 10 minutes away from this beautiful, vibrant and internationally known Banff tourist town. Research indicates that the Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited. 4 The investment in assets (cash, inventory, equipment) required for the new location is 5 Minimum required return on investments S 162,000 16% 20% Actual 2019 return on investment of the original location 7 Management has provided the following income statement to the bank manager the expected net income in the Static Budget % 9 Amount 10 Sales in Units 4,200 11 Sales 525,000 100% 12 Less: Variable Costs 13 Cost of Goods Sold 225,000 43% 14 Sales Commissions 78.750 15% 15 Total Variable Costs 303.750 58% 16 Contribution Margin 221,250 42% 17 Less: Fixed Cont 18 Advertising 21,000 19 Property Taxes 9,000 20 Rent 54,000 21 Salaries & Wages 113,000 22 Total Fixed Costs 197.000 24,250 23 Net Operating income 24 25 Part A: 14 marks) Calculate the following performance measurements for the proposed Canmore expansion 26 Margin (see Chapter 11 notes) 27 28 Turnover (use investment in assets in equation) 29 30 Return on investment 31 32 Residual Income 34 Part : Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions) a. If management is evaluated based on RO, will the project be accepted (expansion into Canmore? Why or 35 why not? 37 b. If management is evaluated based on residual income, will the expansion into Canmore be accepted? Why or why not? Question 4-Performance Measurement (8 marks) The president feels very strongly that Mountain Sports should expand operations to a second location. She has even found a prime location in Canmore, Alberta, One of the great things about Canmore is its proximity to the t mountains, and its only about 10 minutes away from this beautiful, vibrant and internationally known Banff tourist town. Research indicates that the Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited. The investment in assets (cash, inventory, equipment) required for the new location is $ 162,000 Minimum required return on investments 16 % Actual 2019 return on investment of the original location 20% Management has provided the following income statement to the bank manager the expected net income in the Static Budget % Amount Sales in Units 4,200 Sales 525,000 100% Less: Variable Costs: Cost of Goods Sold 225,000 43% Sales Commissions 78.750 15% Total Variable Costs 303,750 58% Contribution Margin 221,250 42% Less: Fixed Costs: 21,000 Advertising Property Taxes 9,000 Rent 54,000 Salaries & Wages 113,000 Total Fixed Costs 197,000 Net Operating Income 24,250 Part A: (4 marks) Calculate the following performance measurements for the proposed Canmore expansion: Margin (see Chapter 11 notes) Turnover (use investment in assets in equation) Return on Investment Residual Income Part B: Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook definitions). a. If management is evaluated based on ROL, will the project be accepted (expansion into Canmore)? Why or why not