Bellco, a division of Becker International Corporation, is operated under the direction of Antoin Sedatt Bellco is an independent investment center with approximately $73,790,000 of assets that generate approximately $10,470,000 in annual net income Becker International has additional investment capital of $13,800,000 that is available for the division managers to invest Mr Sedatt is aware of an investment opportunity that will provide an 13 percent annual net return Becker Internationals desired rate of return is 12 percent Required Assume that Mr Sedatts performance is evaluated based on his ability to maximize return on investment (ROI) Compute ROI using the following two assumptions Bellco retains its current asset size and Bellco accepts and invests the additional $13,800,000 of assets Determine whether Mr Sedatt should accept the opportunity to invest additional funds Assume that Mr Sedatts performance is evaluated based on his ability to maximize residual income Compute residual income using the following two assumptions Bellco retains its current asset base and Bellco accepts and invests the additional $13,800,000 of assets Determine whether Mr Sedatt should accept the opportunity to invest additional funds Which technique (ROI or residual income) is more likely to result in suboptimization Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 5 Assume that Mr Sedatts performance is evaluated based on his ability to maximize return on investment (ROI) Compute ROI using the following two assumptions Bellco retains its current asset size and Bellco accepts and invests the additional $13,800,000 of assets Determine whether Mr Sedatt should accept the opportunity to invest additional funds (Do not round intermediate calculations Round ROI with additional investment to 2 decimal places (i e , 2345 should be entered as 23 45) ) Show less Current ROI ROI with additional investment Whether Mr Sedatt should accept the opportunity to invest additional funds Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 5 Assume that Mr Sedatts performance is evaluated based on his ability to maximize residual income Compute residual income using the following two assumptions Bellco retains its current asset base and Bellco accepts and invests the additional $13,800,000 of assets Determine whether Mr Sedatt should accept the opportunity to invest additional funds Current Residual Income Residual Income with additional investment Whether Mr Sedatt should accept the opportunity to invest additional funds Complete this question by entering your answers in the tabs below Required 1 Required 2 Required 5 Which technique (ROI or residual income) is more likely to result in suboptimization Which technique is more likely to result in suboptimization

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Bellco, a division of Becker International Corporation, is operated under the direction of Antoin Sedatt. Bellco is an independent investment center with approximately $73,790,000 of

Bellco, a division of Becker International Corporation, is operated under the direction of Antoin Sedatt. Bellco is an independent investment center with approximately $73,790,000 of assets that generate approximately $10,470,000 in annual net income. Becker International has additional investment capital of $13,800,000 that is available for the division managers to invest. Mr. Sedatt is aware of an investment opportunity that will provide an 13 percent annual net return. Becker Internationals desired rate of return is 12 percent.

Required

Assume that Mr. Sedatts performance is evaluated based on his ability to maximize return on investment (ROI). Compute ROI using the following two assumptions: Bellco retains its current asset size and Bellco accepts and invests the additional $13,800,000 of assets. Determine whether Mr. Sedatt should accept the opportunity to invest additional funds.

Assume that Mr. Sedatts performance is evaluated based on his ability to maximize residual income. Compute residual income using the following two assumptions: Bellco retains its current asset base and Bellco accepts and invests the additional $13,800,000 of assets. Determine whether Mr. Sedatt should accept the opportunity to invest additional funds.

Which technique (ROI or residual income) is more likely to result in suboptimization?

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Required 5

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