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Question 1 Jasman Holdings is organized in three separate divisions. The three divisional managers are...

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Question 1 Jasman Holdings is organized in three separate divisions. The three divisional managers are evaluated at year-end, and bonuses are awarded based on return on investment (ROI). Last year, the overall company produced a 12% return on its investment. Managers of Jasman's Sales Division recently studied an investment opportunity that would assist in the division's future growth. Relevant data are as follows: Sales Division Investment Opportunity (RM) (RM) Income 12,800,000 4,200,000 Invested Capital 80,000,000 30,000,000 Required: a) Compute the rol of the Sales Division, with and without the new investment opportunity. b) Determine whether the management of Sales Division agrees to the investment decision? Explain your answer. c) Determine whether the corporate management of Jasman Holdings agrees to the investment decision? Explain your answer. d) Assume that Jasman Holdings uses residual income (RI) to evaluate performance and desires an 11% minimum return on invested capital. Compute the RI of the Sales Division, with and without the new investment decision. Will divisional management likely change its decisions toward the investment opportunity? Explain your answers

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