QUESTION 4

Part 1

Destin Marine uses ROI (return on investment) to evaluate the performance of its 2 division managers (Powerboats and Sailboats). The following estimates of relevant measures have been made for the upcoming year:

Powerboats Sales $18,000,000 Expenses $16,200,000 Divisional assets $15,000,000 Sailboats $48,000,000 $42,000,000 $30,000,000 Total Company $66,000,000 $58,200,000 $45,000,000