Question 3: Divisional performance measures G p|c has four divisions: N, O, P and Q. The divisional managers have previously been assessed using return on investment. These divisions are investment centres and can offer their products to the same market. A new project which may be of interest to the four divisions will cost 2,000,000. Only one division is expected to undertake this project which will need to be approved by the management of G plc. Further information is given below: Current return 10 % 12 % 21 % 22 % on investment Controllable 250,000 200,000 400,000 350,000 prot The overall cost of capital for G plc is 15 %. a. Calculate the return on investment and residual income for Divisions N, O, P and O. b. Based on your results in (a) above, which division will be motivated to invest in the project? In the interest of G plc, which division should invest in the project? Give reasons for your answer. 0. The management of G plc are wondering if there are other ways to reduce the unhealthy competitive behaviour among the four divisions. Write a short report to the management of G pIc, suggesting ways in which the dysfunctional behaviour of the divisional managers can be avoided