Sparkle Ltd. is currently considering purchasing one of, or, possibly both of two companies (Bright Ltd and Shines Ltd) to further broaden its service offerings. You are the company's financial controller and are provided with the following information.

	Sparkle Ltd.
Sales	$3,000,000
Variable costs	55% of sales
Fixed costs	$750,000
Invested capital	$2,500,000

If Sparkle Ltd. acquires Bright Ltd., it would expect to increase its profit by 40% and would require an additional capital investment of $450,000. If Sparkle Ltd. acquires Shines Ltd., it would expect to increase its profit by 25% and would require an additional capital investment of $950,000. Sparkle Ltd has a minimum required rate of return of 12%. 1. Assuming that Sparkle Ltd uses Return on Investment (ROI) to measure management's performance and there are sufficient resources to invest in both alternatives, you are required to calculate the ROIs of Sparkle Ltd. both before and after the acquisition of the respective investment alternatives. You are required to advise if Sparkle should acquire Bright or Shines or both. (4 marks)