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25 points eBook 3 References Mt Graw Hill Educatmn The Empire Hotel is a full-service hotel in a large city. Empire is organized into three departments that are treated as investment centers. Budget information for the coming year for these three departments is shown as follows. The managers of each ofthe departments are evaluated and bonuses are awarded each year based on ROI. Empire Hotel. Hotel. Rooms Restaurants Health Spa Average investment $ 8.327.000 $5,073,000 $1,044,000 Sales revenue $10,000,000 $2,000,000 $ 600,000 Operating expenses 8,495,000 1,448,000 445,000 Operating earnings $ 1,505,000 $ 552.000 $ 155.000 Required: 3. Compute the ROI for each department. Use the DuPont method to analyze the return on sales and capital turnover. Assume the Health Spa is considering installing new exercise equipment. Upon investigating. the manager of the division nds that the equipment would cost $40,000 and that operating earnings would increase by $8,000 per year as a result of the new equipment. b-1. What would be the ROI of investment in the new exercise equipment and Health Spa? b-2. Would the manager of the Health Spa be motivated to undertake such an investment? c-1. Compute the residual income for each department ifthe minimum required return for the Empire Hotel is 17 percent. c-2. What would be the impact ofthe investment on the Health Spa's residual income? Complete this question by entering your answers In the tab: below. Req A Req Bl ' Reg 52 ' Req C1 ' Req C2 What would be the ROI of investment in the new exercise equipment and Health Spa? (Round your percentage answers to 2 decimal places (i.e., 0.1234 should be considered as 1234.)) EI-II- Prev 1 of 4 Next )