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Benet Division of United Refinery Companys operating results include: net operating income, $200,000; sales $2,200,000; and operating assets, $800,000. The Benet Divisions ROI is 25%.
Benet Division of United Refinery Companys operating results include: net operating income, $200,000; sales $2,200,000; and operating assets, $800,000. The Benet Divisions ROI is 25%. Management is considering a project with net operating income 30,000; and an asset investment of $150,000. Should management accept this new project?
- Yes, since additional sales always mean more customers.
- No, since ROI will be lowered.
- No, since a loss will be incurred.
- Yes, since ROI will increase.
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