Accepting a project based on RI

Hi All,

Question:

“Division A of Aigburth Co is considering a project which will increase annual net profit after tax by $30,000 but will require average inventory levels to increase by $200,000. The current target rate of return on investments is 13% and the imputed interest cost of capital is 12%

Based on the ROI and/or RI criteria, would the project be accepted?

Answer:
ROI- Yes
RI – Yes

ROI calculated at 15% – accept
RI calculated at $6000 – accept

My question is, on what basis would you accept a project when calculating RI?

I understand why you would accept on ROI as it is higher then the target rate, but the calculated RI is $6000 and I am not sure why they have accepted on that basis? Please help!

Thanks,

Vicki