The division of a company has an opportunity to invest in a new project. The project will
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Question:
The division of a company has an opportunity to invest in a new project. The project will yield an incremental operating income of $ on average invested assets of $ The division currently has net operating income of $ on average invested assets of $ The company requires a rate of return on new projects.
What is the divisions ROI before making an investment in the project?
What is the divisions residual income before making an investment in the project?
What is the divisions ROI after making the investment in the project?
What is the divisions residual income after making the investment in the project?
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