Question: its very urgent the topic is based on short term investment QUESTION Haulage Ltd, a transport company, is planning its future investment strategy. Haulage's best
QUESTION Haulage Ltd, a transport company, is planning its future investment strategy. Haulage's best projections of profit outcome are dependent upon the cost of fuel as shown below. The company's minimum required rate of return is 10% p.a. (a) For each level of investment, compute the retum on investment (ROI) and the residual income (RI). (18 Marks) (b) If the company uses ROl as a measure of performance, determine the optimal level of investment. Marks) (c) If RI is used for assessing performance, determine the optimal investment level. 13 Marks) (d) State any two (2) advantages for each of using RI and ROI as performance. Marks) QUESTION Haulage Ltd, a transport company, is planning its future investment strategy. Haulage's best projections of profit outcome are dependent upon the cost of fuel as shown below. The company's minimum required rate of return is 10% p.a. (a) For each level of investment, compute the retum on investment (ROI) and the residual income (RI). (18 Marks) (b) If the company uses ROl as a measure of performance, determine the optimal level of investment. Marks) (c) If RI is used for assessing performance, determine the optimal investment level. 13 Marks) (d) State any two (2) advantages for each of using RI and ROI as performance. Marks)
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