You are a consultant hired to advise ABC Limited on ROI and help with decision making
for additional order. The company has provided you following information: 

The amount of division investment is Rs. 15,00,000 and the target rate of return on
investment is 20%

a. Based on the information provided calculate ROI and Residual income of ABC Limited.

b. Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order
is accepted, the variable cost per unit will remain the same. However, fixed costs would
increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be
required. Analyze the impact on residual income.