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Question 4 (32 marks) Sunlux Group is a divsionalised company that has divisions in other countries but headquartered in Namibia. Due to the divisionalised nature
Question 4 (32 marks) Sunlux Group is a divsionalised company that has divisions in other countries but headquartered in Namibia. Due to the divisionalised nature of Sunlux, performance measurement is of crucial importance to determine the progress each division is making and to reward those divisions who are performing exceptionally well. Sunlux currently uses return on investment (ROI) and residual income (RI) to assess the performance of the divisions. The following financial records have been extracted for the Malawian Division. The Malawian Division reports in Namibian dollars. Sunlux uses a cost of capital of 5% to assess divisional performance. The capital employed shown in the table above represents the carrying amounts of the division's non-current assets. Other operational expenses are inclusive of annual depreciation charge. The Malawian Division did not add or dispose non-current assets at any time in the three years. Neither additions nor disposal are anticipated in the 2023 financial period. For the current financial year (2023), revenues and expenses (excluding depreciation) will maintain the 2022 figures. New project The board of directors for Sunlux are proposing a project that would require an investment of N\$2 000000 . They believe this is a lucrative project and have provided the following details: Sunlux will apply the same depreciation policy as other non-current assets. There are no additional assets to be procured for this project and it will not have any resale value at the end of the 5 years. The project was anticipated to start at the beginning of September 2022
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