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Asume a corporation's return on investment (ROI) is 15% and one of the corporation's divisions, that currently has a 13% ROI and $750,000 of residual
Asume a corporation's return on investment (ROI) is 15% and one of the corporation's divisions, that currently has a 13% ROI and $750,000 of residual income (RI), is considering a new investment that will reduce the division's ROI but generate $120,000 of RI. If the corporation's objective is goal congruence, the investment: Multiple Choice should not be acquired because it reduces divisional ROI. should not be acquired because it produces $120,000 of residual income. O should not be acquired because the division's ROI is less than the corporate ROI before the investment is considered ooooo O should be acquired because it produces $120,000 of residual income for the division. should be acquired because although the division's ROI will be reduced, it will still be a positive number
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