Question: Consider the information in E Brief Exercise 25.5. Assume that the manager of division 2 has the opportunity to purchase a new piece of equipment

Consider the information in E Brief Exercise 25.5. Assume that the manager of division 2 has the opportunity to purchase a new piece of equipment for $ 3,000,000 that would increase earnings by $300,000 per year. Show the impact of this purchase on division 2's ROI. Would the manager of division 2 be motivated to undertake the investment? Why or why not? Rommel Fabrics is considering an investment proposal with a negative net present value of $50 when a discount rate of 9 percent is used. The same proposal has a positive net present value of $400 when a discount rate of 8 percent is used. What conclusions can be drawn about the estimated return of this proposal

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