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1. A division of Oval plc makes a profit of 220,000 a year, using assets worth 1,000,000. It is considering investing 60,000 in a project
1. A division of Oval plc makes a profit of 220,000 a year, using assets worth 1,000,000. It is considering investing 60,000 in a project which will generate profit of 12,900 a year. The companys cost of capital is 21% If performance was measured using ROI would you expect the project to be acceptable to a) the chief executive of Oval plc and b) the divisional manager? BRIEFLY explain why.
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