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Revision Q- ROI and RI

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Revision Q- ROI and RI

  • This topic has 0 replies, 1 voice, and was last updated 14 years ago by luck2009.
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  • December 1, 2011 at 2:19 pm #50844
    luck2009
    Member
    • Topics: 13
    • Replies: 10
    • ☆

    return for new project 15,000/100,00=15%
    15% < 16%, therefore co should reject this project for division
    ROI-without project 100,000/800,00=12.5%
    ROI-with project (100,000+15,000)/(800,000+100,000)=12.8%
    in this case, division manger would like accecpt

    RI-without project pofit 100,000
    less: interest 16% x 800,000 -128,000
    profit/loss -28,000

    RI-with project profit 115,000
    less: intersst -144,000
    P/L -44,000
    pls correct me.

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