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Alpha Division of Bravo Corporation has income of $250,000 and an asset investment of $1,562,500, is considering an investment that will cost $450,000 and result
Alpha Division of Bravo Corporation has income of $250,000 and an asset investment of $1,562,500, is considering an investment that will cost $450,000 and result in a profit of $67,500. Assuming Bravo uses an imputed interest charge of 14%, would the investment be attractive to: Alpha, if divisional management used return on investment to evaluate divisional performance? Yes Yes Yes No No Alpha, if divisional management used residual income to evaluate divisional performance? Yes No No Yes Yes Bravo Corporation Yes No Yes Yes No Multiple Choice Choice A 0 Choice B 0 Choice C 0 Choice D 0 Choice E
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