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 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 timited The investment in assets (cash triventory, equipment required for the new location is $ 168,000 Minimum required return on investments 10% Actual 2019 return on investment of the original location 20% Management has provided the following income statement to the bank manager the expected net Static Budget Amount Sales in Units 4080 Sales 510,000) 100% Less Vanable Costs Cost of Goods Sold 217 000 43% Sales Commissions 76 500 15% Total Variable Costs 293500 58% Contribution Margin 216 500 42% Less Foxed Costs Advertising 22 000 non 293 500 216 500 58% 42% Total Variable Costs Contribution Margin Less Fixed Costs Advertising Property Taxes Rent Salaries & Wages Total Fixed Costs Net Operating Income 22.000 9.000 46,000 115,000 192 000 24.500 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 ROI, will the project be accepted (expansion into Canmore)? Why or why not