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Calculation of ROI and RI

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Added on  2022-12-09

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This document provides the calculation of ROI and RI for Division C, Division Q, and Division R. It also discusses the advantages of new investment proposals and the impact on overall return on investment. Additionally, the document includes the calculation of budgeted life-cycle operating income for a new tablet.

Calculation of ROI and RI

   Added on 2022-12-09

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Question 2
ROI:
Net income / Total investment * 100
Division C
= 5292 / 15660 * 100
= 33.79%
Division Q
= 936 / 3360 * 100
= 28%
Division R
= 10566 / 22890 * 100
= 46.15%
The Division R generate the maximum return over the investment. This is possible
that the respective product contain the most number of demands. This can certainly allow the
business entity to maximises its overall return against the investment made in the project.
b)
RI:
Net income – Expected return / Total investment
Division C
= 5292 – 4572 (20% of 22860 (15660 + 7200) / 15660 * 100
= 4.5%
Division Q
= 936 – 852 (20% of 4260 (3360 + 900))/ 3360 * 100
= 2.5%
Division R
= 10566 – 5628 (20% of (22890 +5250)) / 22890 * 100
= 21.57%
Calculation of ROI and RI_1

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