AutoSave O Off FE_ACCT6285 - Accounting for Business_2010-converted - Compatibility Mode . ANDIKA PRATAMA AP File Home Insert Design Layout References Mailings Review View Help Share Comments Find Verdana * 9,5 - A" A Aa Po AaBbCc[ AaBbCcD: AaBbCc[ AaBbCc[ G'c Replace Paste BIU ax x ADA. 1 Normal 1 Body Text 1 List Para... 1 No Spac... Dictate Sensitivity Editor Select Clipboard Font Paragraph Styles Editing Voice Sensitivity Editor QUESTION 4 [25 MARKS] Three construction companies operate in the Middle East, their selected sales and operating data are as follows. Gama Alfa Beta Sales $40,000,000 $20,000,000 $24,000 Average Operating Assets $8,000,000 $5,000,000 $12,000,000 Net Operating Income $1,280,000 $1,000,000 $960,000 Minimum Required Rate of Return 16% 14% 10% Required: 1. Compute the Return on Investment (ROI) for each company using the formula stated in terms of margin and turnover. [7.5 marks] 2. Compute the Residual Income for each company. [7.5 marks] 3. At one time the three companies were offered an investment opportunity that would yield a 15% rate of return. a) Using ROI as a performans e measurement, which company or companies will probably accept or reject? Why? [5 marks] b) Using Residual Income as a performance measurement, which company or companies will probably accept or reject the opportunity? Why? [5 marks] Page 4 of 4 1227 words x English (United States) " Focus + 909% HCABO 10:02 Type here to search W X A 26/01/2021