Current Attempt in Progress

Waterway Division's operating results include: controllable margin of $$224000,$ sales totaling $$1400000,$ and average operating assets of $$800000.$ Waterway is considering a project with sales of $$100000,$ expenses of $$88000,$ and an investment of average operating assets of $$200000.$ Waterway's required rate of return is $8\%.$ Should Waterway accept this project?

No$,$ the return is less than the required rate of $8\%.$

Yes, ROI still exceeds the cost of capital.

No$,$ ROI will decrease to $6\%.$

Yes, ROI will drop by $6\mathrm{.}6\%$ which is still above the minimum required rate of return.

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