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information: Profit Which of the investment centre X or Y is more successful with the following Capital Employed X Y 12 6 80 24
information: Profit Which of the investment centre X or Y is more successful with the following Capital Employed X Y 12 6 80 24 25% (3 Marks) Return on Investment (ROI) 15% (c) A division with capital employed of #2million currently earns ROI of 22%. It can make an additional investment of #250,000 for a 5 year life with nil residual value. The average net profit from this investment would be #60,000 after depreciation. The division's cost of capital is 14%. What is the Residual Income before and after investment? (7 marks)
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