Question: Crane Division s operating results include: controllable margin of $ 1 2 5 0 0 0 , sales totaling $ 1 2 0 0 0

Crane Divisions operating results include: controllable margin of $125000, sales totaling $1200000, and average operating assets of $500000. Crane is considering a project with sales of $100000, expenses of $84000, and an investment of average operating assets of $200000. Cranes required rate of return is 10%. Should Crane accept this project? No, the return is less than the required rate of 10%. Yes, ROI will drop by 6.6% which is still above the minimum required rate of return. No, ROI will decrease to 8%. Yes, ROI still exceeds the cost of capital.

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