Question: Division A is considering a project that will earn an ROA (Return on Assets) that is greater than the cost of capital, but less than

Division A is considering a project that will earn an ROA (Return on Assets) that is greater than the cost of capital, but less than the divisions ROA. Division B is considering a project that will earn an ROA that is greater than the divisions ROA, but less than the cost of capital. If both divisions are evaluated based on residual income, would these divisions accept or reject their projects?

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