SBUS Limited is a reputable manufacturing company in Hong Kong. The following is the draft financial data for ACY Limited, one of SBUS Limited's subsidiaries, for Year 2020: SBUS Limited Assets Cash Accounts receivable Inventory Plant and equipment, net Investment in PTS Limited Land Total assets Statement of Financial Position As at 31 December 2020 Beginning Balance Ending Balance $440,000 $400,000 660,000 900,000 580,000 660,000 1,420,000 1,340,000 900,000 2,000,000 960,000 $6,000.000 2,000,000 $6.260.000 Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity Total liabilities and stockholders' equity Sales Operating expenses Net operating income Interest and taxes: Interest expense Tax expense SBUS Limited $860,000 4,800,000 $900,000 4,800,000 340.000 $6,000,000 560.000 $6.260.000 Statement of Profit or Loss For the year ended 31 December 2020 $12,900,000 12.260,000 $640,000 240,000 60,000 300.000 $340,000 Net income Fanny Mok, the Chief Financial Officer of SBUS Limited, explained to Larry Leung, the Chief Executive Officer of SBUS Limited that, for the assets of ACY Limited, straight line depreciation is used for plant and equipment. ACY Limited holds the shares of PTS Limited for investment purpose and the land for future use. ACY Limited paid dividends of $120,000 in 2020. The management of ACY Limited is evaluated on the basis of return on investment (ROI), with the higher the ROI, the higher the amount of the year-end bonuses awarded. ACY Limited has a project to expand its product line in Shenzhen that would require an additional investment in operating assets of $2,000,000. The new project would bring additional sales of $6,000,000. Costs for this new project include variable expenses of 71% of sales and fixed expenses of $1,440,000. Fanny introduces to Larry the use of residual income for performance evaluation. Fanny also suggests to Larry that he may consider to use balanced scorecard to evaluate the employees of SBUS Limited and other subsidiaries including ACY Limited, instead of relying solely on ROI. Different measures can be developed and used for different companies.