Division X manager at PT Ariani is currently facing investment opportunities in 2 independent projects, namely project A and project B. Currently, the division uses operating assets of IDR 10,000,000,000 and generates an operating profit of IDR 1,600,000,000. 00. Information relating to the project is:

Description:                               Project A                          Project B

Investment expenditure IDR 650,000,000.00             IDR 400,000,000.00

Operating profit                          91,000,000.00             52,000,000.00

For this investment purpose, the head office provides funds amounting to Rp1,300,000,000.00. Of this amount, if anything is unused, the head office will use it for investment with a return rate of 10%.

As a management accountant, you are asked to:

1. Calculate the ROI for each investment.

2.Calculate the division ROI for each of the following conditions:

a. Invest in project A only

b. Invest in project B only

c. Invest in both projects

d. Investments in projects A and B

e. No investment is made

3. Calculate the EVA for each investment

4. Calculate the division EVA for each of the following conditions:

a. Invest in project A only

b. Invest in project B only

c. Invest in both projects

d. Investments in projects A and B

e. No investment is made

Answer rating: 100% (QA)

Answer A Project A Operating Income Operating Assets 91... View the full answer