Question 3 (6 marks) Enrod PLC has two divisions: Old and New. Its summary results are: Old New Investment 2,000,000 5,000,000 Net profit 400,000 900,000 Enrod’s cost of capital is 16%. Compare the performance of the two divisions under both ROI and Residual income measures (4 MARKS). In which division should Enrod invest more capital and why? (2 MARKS)
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