• Using the companys cost of capital of 3% determine and comment on the Residual Income for each division.

Question Three Cine Producers have just reported an operating profit of \\( 128 \\) million for the year ending December 2022. The results of its three operating divisions are presented below. Statement of financial position extract ( millions) The company currently uses Return on Capital Employed (ROCE) as its single measure to assess and compare the financial performance of the divisions. However, the company has now decided: - To set a target return on capital employed (ROCE) for each division and to pay a bonus to the Divisional Manager if the target is met. - To also use Residual Income (RI) as a divisional performance measure. The company has calculated its cost of capital at \3. - To use appropriate non-financial performance measures. You may assume that the company does not pay corporation tax