MERS 9 Financial Instruments introduces a business model test that requires an entity to assess whether its business objective for a debt instrument is to collect the contractual cash flows of the instrument as opposed to realising its fair value change from sale prior to its contractual maturity. Required: Assess the business model for each of the scenario below and explain the appropriate accounting treatment for the investment. (b) Heksagon Bhd expects to incur capital expenditure in a few years' time. Heksagon Bhd invests its excess cash in short and long-term financial assets so that it can fund the expenditure when the need arises. Many of the financial assets have contractual lives that exceed Heksagon Bhd's anticipated investment period. Heksagon Bhd will hold financial assets to collect the contractual cash flows and, when an opportunity arises, it will sell financial assets to re-invest the cash in financial assets with a higher return. The remuneration of the managers responsible for the portfolio is based on the overall return generated by the portfolio. (4 marks)