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opportunities that is made available to their company. The following information was presented for decision making. Project Stark (RM) 985,000 Project Tully (RM) 1,000,000 254,000 2,200,000 Project Tyrel (RM) 920,000 281,200 Sales Fixed expenses Operating assets 213,750 1,840,000 1,980,000 Additional information:

opportunities that is made available to their company. The following information was presented for decision making. Project Stark (RM) 985,000 Project Tully (RM) 1,000,000 254,000 2,200,000 Project Tyrel (RM) 920,000 281,200 Sales Fixed expenses Operating assets 213,750 1,840,000 1,980,000 Additional information:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A) Calculate the Return on Investment (ROI) for each of the portfolio.


B) Based on the required rate of return, determine the Residual Income (RI)
for each of the portfolio.


C) If King Bhd is to choose only ONE (1) portfolio to invest in, advise the management team based of your answer in (a).

 

Please provide a calculation for each of them. 

Kings Bhd under its strategic planning units is considering several investment opportunities that is made available to their company. The following information was presented for decision making. Project Stark (RM) 985,000 Project Tully (RM) 1,000,000 254,000 2,200,000 Project Tyrel (RM) 920,000 281,200 1,980,000 Sales Fixed expenses Operating assets 213,750 1,840,000 Additional information: (i) The contribution margin recorded for each project is 65% of their sales values. (ii) Required rate of return for each project is 15%.
Transcribed Image Text:Kings Bhd under its strategic planning units is considering several investment opportunities that is made available to their company. The following information was presented for decision making. Project Stark (RM) 985,000 Project Tully (RM) 1,000,000 254,000 2,200,000 Project Tyrel (RM) 920,000 281,200 1,980,000 Sales Fixed expenses Operating assets 213,750 1,840,000 Additional information: (i) The contribution margin recorded for each project is 65% of their sales values. (ii) Required rate of return for each project is 15%.
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