Subject : Mangerial and Cost Accounting

Course : Bachelor's degree in Human Resource Management

(Question 6) Imelda corporation is considering an investment opportunity. The following information was provided on several investment portfolio opportunity based on their past performance. Project Project Project Marine Air Hill Sales (RM) 125,400 185,400 220,400 Contribution margin (RM) 63,200 80,066 142,076 Operating assets (RM) 252,800 326,800 645,800 Minimum required rate of 10 12 15 return (%) The fixed expenses recorded on each project is equivalent to 10% on the value of their operating assets. Required: (a) Calculate the Return on Investment (ROI) for each of the portfolio. (8 marks) (b) Based on the required rate of return, determine the Residual Income (RI) for each of the portfolio. (6 marks) 7/8 (c) If Imelda corporation is to choose only ONE (1) portfolio to invest in, advise the management team based of your answer in (a). (3 marks) (d) Assume that Imelda corporation received another investment opportunity that could generate 14% return on investment, determine whether each project should be accepted or rejected under ROI approach. (3 marks) (e) Suggest THREE (3) ways in which the least profitable investment portfolio may increase the value of its ROI. (3 marks) (f) Imelda Corporation is a retail hypermarket. Suggest ONE (1) example of its cost centre and revenue centre. (2 marks) 25 marks END OF