Contra Sdn. Bhd. (CSB) has just formed a new division, and the following four investment opportunities are available to the division:

Investment

Opportunities Income Investment

1 $57,600 $ 640,000

2 $75,000 $ 600,000

3 $60,000 $ 1,000,000

4 $59,500 $ 850,000

CSB minimum required rate of return for all new projects is 8%.

1.Calculate the return on investment (ROI) for each investment opportunity.(2 marks)

2.If you were the new division manager and you were evaluated based on ROI, which investment opportunity would you accept? Explain your decision.

3.If you are the Chief Executive Officer (CEO) of CSB, which project(s) would you want the division to accept? Explain your decision.