Sports Inc. is a decentralized company with 4 division: football, golf, hockey, and tennis. Management bonuses are based on divisional ROI. The tennis division produces gear for intermediate and advanced tennis players. The manager of the division is faced with an opportunity to invest in 2 independent projects. In the first project the division would acquire new equipment that should increase quality and reduce manufacturing costs. The total investment would be $1,200,000 and generates annual savings of $186,000. The second project will provide the opportunity to develop and market a new type of racket made of composite materials. Development cost for the new type of racquet would amount to $900,000 and increase operating income by $112,500. If no new investment is made, the tennis division will have average assets of $9,000,000 and increase operating income of $1,350,000 for the coming year. Sports management has $2,400,000 of capital available for the tennis division. If no investment is made, the capital will be invested at 12%, the minimum rate of return that Sports requires for all investments made by the divisions. Required a. Compute the individual ROI for each project. (2 Marks) b. Compute next years divisional ROI for each of the following scenarios: (6 Marks) 1) No new investment is made. 2) New manufacturing equipment is acquired. 3) The new type of racquet is developed. 4) New manufacturing equipment is acquired and the new type of racquet is developed. Explain which scenario the manager of the tennis division should choose. Identify the risks associated with your decision. Justify your answer. c. From the point of view of Sports as a whole, compute the above 4 scenarios and indicate which should be chosen. Using quantitative analysis, explain why your answer is the same or different from part b). (6 Marks)