answer, calculation and explain

Question 4 - Performance Measurement (8 marks) The president feels very strongly that Mountain Sports should expand operations to a second location. She has even found a prime location in Canmore, Alberta, One of the great things about Canmore is its proximity to the mountains, and its only about 10 minutes away from this beautiful, vibrant and internationally known Banff tourist town. Research indicates that the Canmore market is well suited to both cross-country skis and bikes that competition is fairly limited. The investment in assets (cash, inventory, equipment) required for the new $ 216,000 Minimum required return on investments 16% Actual 2019 return on investment of the original location 22% 8 Management has provided the following income statement to the bank manager the expected Static Budget % 9 Amount 10 Sales in Units 4,008 11 Sales 501,000 100% Less: Variable Costs: 13 Cost of Goods Sold 217,000 43% 14 Sales Commissions 150 15% 15 Total Variable Costs 292,150 58% Contribution Margin 208,850 42% Less: Fixed Costs: 18 Advertising 20,000 19 Property Taxes 9,000 20 Rent 54,000 Salaries & Wages 108,000 Total Fixed Costs 191,000 Net Operating Income 17,850 24 25 Part A: (4 marks) Calculate the following performance measurements for the proposed Canmore expansion: 26 Margin (see Chapter 11 notes) 28 Turnover (use investment in assets in equation) 29 30 Return on Investment 31 32 Residual Income 33 34 Part B: Analysis (4 marks) Explain in your own words using case data. Marks will not be awarded for textbook a. If management is evaluated based on ROI, will the project be accepted (expansion into 35 Canmore)? Why or why not