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Operating result for a division for 2019 are budgeted as follows Revenue =7,000,000 Var cost =1,500,000 Contribution margin =3,500,000 Fixed expense = 1,500,000 Net operating

Operating result for a division for 2019 are budgeted as follows

Revenue =7,000,000

Var cost =1,500,000

Contribution margin =3,500,000

Fixed expense = 1,500,000

Net operating income=500,000

Operating assets = 5,000,000

Planning to add new investment of 1,070,000 which will generate income of 1,500,000, fixed expense of 300,000, the variable price will be 50% of the selling price. cost of capital is 15%.. Find the performance measure that could create a underinvestment problem and performance measure that could reduce under investment problem

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