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The Beatrice company has two divisions, North and South, both of which are treated as investment centers. The following information was collected from the divisions'

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The Beatrice company has two divisions, North and South, both of which are treated as investment centers. The following information was collected from the divisions' 2019 financial statements: North South Net operating income (in $ thousands) 17578 9747 Sales (in $ thousands) 153713 91 194 End of year operating assets (in $ thousands) 58117 28978 Variable cost (in $ thousands) 74318 40332 Average selling price per unit 12.93 12.47 For simplicity, assume end of year, rather than average, assets are used in all relevant calculations. Beatrice's cost of capital is 0.11. Calculate North division's ROI (3 digits, don't express as a percentage, so e.g., 0.225 rather than 22.5%). Answer: 0.302North division's manager is considering installing new equipment upgrade to expand production since demand is currently outstripping supply. The plant upgrade would increase xed manufacturing costs by $1313 thousand annually and leave variable costs per unit unchanged. Operating assets would increase by $6292 thousand (Beatrice would need to borrow additional funds to provide this capital). With the extra capacity, the company could expand sales volume by 2043 thousand units while maintaining the same average price per unit. What is the annual differential prot for Beatrice from the equipment upgrade (in 35 thousand)? Based on the information in the prior question, what would North division's ROi be if the new equipment is installed? (Again 3 digits.) Another decision under consideration would increase operating prot ofthe South division by $1200 thousand and operating assets by $4414 thousand. Assume the manager of South division is evaluated based on ROI. Would the South manager choose to do what is in Beatrice's best interest in making this decision? (Answer 2 for yes) I for no.) Assume that the manager of North division has the opportunity at the end of the year to hide 2% of the division's xed costs by deferring them until next year (e.g., by delaying maintenance activities). How much would this increase the division's RI? {in 1 thousands)

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