BackCountry Hiking Company produces and sells specialty camping equipment nationally and internationally. Following is information about two divisions after exchange rate corrections:

REQUIRED
A. Calculate each division's ROI.
B. Calculate each division's residual income.
C. Calculate each division's EVA.
D. Evaluate the two divisions. Write a memo to the CEO explaining the performance of the two divisions.
E. Suppose the German division had an opportunity to invest $350,000 in a project that would generate sales of $500,000 and return on sales of 10%, or $50,000. Would the division manager be likely to undertake this project if he or she is evaluated using ROI? Explain.

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Germany Canada Invested capital (total assets) Net operating income Required rate of return Weighted average cost of capital Current liabilities After-tax income $400,000 $2,000,000 $100,000 $ 750,000 10% 9% $ 8,000 $ 40,000 $60,000 300,000 10% 9%