=+PR 24-4A Effect of proposals on divisional performance obj. 4

✔ 1. ROI, 14.4%

Chapter 24 Performance Evaluation for Decentralized Operations 1121 equipment, which has no remaining book value, would be scrapped at no gain or loss.

The new equipment would increase invested assets by an additional $600,000 for the year.

Proposal 3: Reduce invested assets by discontinuing an engine line. This action would eliminate sales of $330,000, cost of goods sold of $286,300, and operating expenses of

$65,000. Assets of $420,000 would be transferred to other divisions at no gain or loss.

Instructions