with solutiins please

1. A division has the ff. operating data:

Operating assets - 400k

Operating income (OI) - 100k

Minimum rate of return - 16%

A. Compute the ROI and RI for this division.

B. If the division is presented with an investment product yielding 20% ROI and cash outlay of 60k, what's the new ROI and RI for this division?

C. Would the division accept the investment in B., under the ROI approach?

D. Having the same offer in B., would the division accept the investment under the RI approach?

2. A company has 2 divisions with the following data:

Division 1

Sales - 9M

Net OI - 630k

Ave. OI - 3M

Division 2

Sales - 20M

Net OI - 1.8M

Ave. OI - 10M

A. Compute the ROI for each division.

B. Compute the RI for each division with 16% minimum required return.

C. Does Division 2's greater RI indicate better management? Explain.

3. A company has 2 divisions: the S Division and B Division. S Division produces and sells a part with the ff. data:

Capacity in units - 100k

Selling price to outside customers - 30

Variable costs per part - 16

Fixed cost per part (based on capacity) - 9

B Division is currently buying 10k parts per year from outside supplier at 29 per part.

A. If S Division has idle capacity to cater to B Division's needs, what's the transfer price's acceptable range for the 2 divisions?

B. If S Division could sell all that it produces to the outside market, what's the transfer price's acceptable range for the 2 divisions?

C. Same conditions in B. except that there's avoidable variable selling expenses amounting to 3 for transfers within the company. What's the transfer price's acceptable range for the 2 divisions?