QUESTION 3 Pallas Hotel is a boutique hotel located in the city of Europa. It has two restaurants - one selling Asian food and the other selling Western food. For the financial year ended 30 June 2022, the hotel's divisional performance report shows the following data: Asian Western Restaurant Restaurant $ $ Accumulated depreciation 250,000 200,000 900,000 800,000 Non-current assets (before deducting accumulated depreciation) Current assets 500,000 600,000 Current liabilities 200,000 100,000 Sales 800,000 1,000,000 Variable costs 360,000 400,000 Fixed costs 200,000 300,000 Allocated common costs 40,000 60,000 Weighted average cost of capital (%) 12 20 25 22 Required rate of return (%) Income tax rate (%) 30 30 The managers of Pallas Hotel are in the process of preparing a Balanced Scorecard for the financial year ending 30 June 2023 in order to improve company performance. The goals and measures identified for the Balanced Scorecard include the following: Goals Measures Improve loyalty % of expired food Increase productivity Gross margin No. of repeat sales Improve profitability Reduce wastage Upgrade skills No. of seminars attended No. of sick-leave free days Required: a) In the table below, match each goal with the relevant Balanced Scorecard perspective, and then match each measure with the most appropriate goal. Goals Measures Perspectives Financial Customer Internal operations Innovation and improvement (5 marks) 6 b) Calculate the Return On Investment (ROI) of the Asian Restaurant and the Western Restaurant. (Round your answers to the nearest %) (2 marks) c) Calculate the Residual Income (RI) of the Asian Restaurant and the Western Restaurant. (1 mark) d) Calculate the Economic Value Added (EVA) of the Asian Restaurant and the Western Restaurant. (2 marks) e) Comment on the results from your findings in parts (b), (c) and (d). (Maximum 150 words) (4 marks) f) The management of Pallas Hotel has come across a further investment opportunity. It does not want to develop a separate division, so one of the existing restaurants would need to take responsibility for the new investment opportunity. Total contribution of the new investment opportunity is estimated to be $250,000. The estimated amount of fixed costs incurred is $120,000. Equipment and other assets which need to be acquired amounts to $800,000. Calculate the ROI of the new investment opportunity, and explain which restaurant(s) would be interested to take over the new investment opportunity. (1 marks) [Total: 16 marks]