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Vegan Corporation is a business that provides carwash service. In the year 2020, the business already has four carwash centres, for which two of it
Vegan Corporation is a business that provides carwash service. In the year 2020, the business already has four carwash centres, for which two of it are in Taman Melawati and Bukit Antarabangsa. The information related to both centres for June 2020 are as follows: Taman Melawati Bukit Antarabangsa Fixtures and Fittings Equipment Other assets Sales Profit (RM) 40,000 29,000 49,000 24,300 17,700 (RM) 30,400 22,100 43,900 19,800 12,050 In addition, rate of return for Taman Melawati centre is 12%, whilst the rate for Bukit Antarabangsa is 5% less than Taman Melawati centre. Required: (a) Determine Return on Investment (ROI) and Residual Income (RI) for both carwash centres (Taman Melawati and Bukit Antarabangsa). (16 marks) (b) Another carwash centre is in Selayang, which has on operating profit of RM18,700 and average assets with a book value of RM107,570. Vegan Corporation expects this centre to has 14% rate of return. Calculate its Return on Investment (ROI) and Residual Income (RI). (7 marks) (c) Which of these TWO (2) centres are performing the best? Justify your answer based on your answer in (a)
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