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Elremen AG is a large German manufacturing group. It has two divisions in Northern Ireland. Divisions A and E. both of which are evaluated as investment centres. Extracts from the internal income Statements of the two divisions for the year ended 31 December 2022 are shown below: E000 E000 Sales E'- 0'l|[|I 5.300 Divisional variable costs 3 050 1500 Divisional contribution 'l TED 1.300 Allocation of co orate-level costs non-controllable 1019 1:400 Divisional xed costs 3200 2.400 Additional information is available as follows: 1} The group cost ofcapital is 0.5% 2} The net assets at 31f12f2022 was: Division A. 3.1m. Division B. 5.2m 3} During the 2022 year. both divisions engaged advertising campaigns at a cost of 75000 [Division A} and 00000 {Division E5]. These amounts are included in the fixed cost above. However: both division managers are condent that their division will benet from these campaigns for the 1years 2022 to 2024 inclusive. 4} Also during the 2022 year. Division A incurred research and development expenditure of 525.000. Division B similarly incurred 00000 expenditure. This expenditure is included in the fixed costs above and is expected yield a benet for five years. 2022 to 2025. 5} The corporatelevel costs are not allocated on any basis related to each division's activily. Rather they are amounts agreed in the past and increased by 26% each yeaL Requirement (a) Based on the information giving, calculate the return on investment and the Economic Value Added for each division. 13 Marks (b) Explain whether or not the present method of allocating corporate-level costs helps in attaining a realistic view of each division's performance. Identify a better method of allocating such costs. 5 marks (c) Explain one other divisional performance measure which could be used at Division A and B, mentioning one advantage and disadvantage of it. 7 Marks Total 25 Marks

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