On the last day of the financial year a division has operating assets with a total carrying amount (book-value) of Rs.300,000. The return on investment for the division is 28%. The division manager, Hassam wants to show better ROI to get bonus included in his salary. He is considering selling a non-current asset immediately before the year end. The non-current asset has a carrying amount of Rs.15,000 and will sell for a profit of Rs.5,000. What would be the Hassam’s division’s return on investment (ROI) immediately after the sale of the asset at the end of the year? Give your answer to 1 decimal place.
On the last day of the financial year a division has operating assets with a total carrying amount (book-value) of Rs.300,000. The
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Division D of ali Ltd is considering a project which will increase annual profit by Rs.16,000 but will require average receivables levels to increase by Rs.100,000. The company’s target return on investment is 10% and the minimum required
Would the return on investment (ROI) and residual income (RI) performance measures motivate the manager of Division D to act in the interest of the Ali company as a whole?
(NB Please pick the letter "A" or "B" to answer the question. Both choices must be correct to earn the full mark for this question
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