QUESTION 4_ Ietmah Cc business is organised into divisions. For operating purposes, each division is regarded as an investment centre, with divisional mangers enjoying substantial autonomy in their selection of investment projects. Divisional managers are rewarded via a remuneration package which is linked to a return on investment [ROI] performance measure. The ROI calculation is based on the net carry value of assets at the beginning ofthe year. Although there is a high degree ofautonomy in investment selection, approval to go ahead has to be obtained from group management at the head office in order to release the finance. Division X is currently investigating three independent investment proposals. Ifthey appear aceptabie, it wishes to assign each a priority in the event that funds may not be available to cover all three. Group finance staff assesses the cost of capital to the company at 15%. The details ofthe three proposal are as follows: Project A Project B Project C MES 60 000 N$ NS 60 000 60 000 initial investment Cash inflow year 1 Cash inflow year 2 Cash inflow year 3 21 000 25 000 10 000 21 000 20 000 20 000 21 000 21 000 20 000 30 000 Cash inflow year4 15 000 40 000 Ignore tax and residual values. Depreciation is straight line over asset life, which is four years in each case. REQUIRED: 4.1. Evaluate using the ROI and give an appraisal ofthe three investment proposal from a divisional and from a company point of view