ANSWER THE FOLLOWING QUESTION BELOW

Capital Investments has two divisions. Each division's required rate of return is 15%. Planned operating results for 2020 are as follows:

Division	Operating Income	Investment
A	$ 15,000	$ 100,000
B	$ 25,000	$125,000

The company is planning an expansion, which would increase each divisions investments by $25,000 and income by $4,500.

Q1) What was the "current ROI" for Divisions A and B, respectively? a) 20% for A and 15% for B b) 15% for A and 20% for B c) 15% for both d) 20% for both

QUESTION 2 What would be the "new ROI" for Divisions A and B, respectively, if they were to take on the expansion? a) 15.6 % for A and 20% for B b) 15% for A and 19.66% for B c) 15.6% for A and 19.66% for B d) 15% for A and 20% for B

QUESTION 3

Assuming division managers are compensated based on their division ROI (which is a reasonably good assumption), which manager is going to want to take on the expansion and which manager is not? a) Division Manager A will want to take on the expansion, but Division Manager B will not. b) Division Manager B will want to take on the expansion, but Division Manager A will not. c) Both division managers will want to take on the expansion. d) Neither division manager will want to take on the expansion.