OhBen Ltd has just opened a new factory and the following four investment opportunities are available to the factory. The organisation has a hurdle rate of 20%.

Required

(a) If you were the factory manager and your performance were evaluated based on ROI, which investment opportunities would you accept?

(b) If you were evaluated on the basis of RI, which investments would you accept?

(c) If you were the chairman of OhBen Ltd, which projects would you want the division to accept and which performance measure would you want to use to encourage this action?

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Opportunity 1234 Income () Investment () 200,000 80,000 120,000 600,000 80,000 500,000 50,000 200,000