Question 4 (Total: 20 marks) ABC Sdn Bhd is a large company, manufacturing and selling advanced technological medical devices. The company has two divisions and the divisional structure is divided based on its product lines, namely Division A, for product line A and Division B, for product line B. Both the divisions operate separately as an investment centre. The two divisions also have full control and responsibility for their own assets and liabilities. The performance of the divisional managers is measured based on the return on investment (ROI) achieved by their division for the year. The following are the extracted information from the latest financial year end for the two divisions: Required: a) Calculate the ROI based on the extracted financial information above and briefly justify each figure used. (4 marks) b) In order to remain competitive in the market, both the divisions have been offered the opportunity to invest in a new machine to increase their productivity. Each of the new machines in Division A and Division B, are expected to provide an estimated ROI of 16 per cent and 13 per cent, respectively. Conclude as to whether, in your opinion, the two divisional managers should invest in the new machines and assess the impact of such a decision on the company as a whole. (8 marks) c) Even though the limitations of ROI have been highlighted for many years, this measure continues to be used to determine divisional managers performance. Comment on this measure as compared to the residual income in measuring the performance of the divisional manager. (8 marks)