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Businesscorp Industries Corp Incorporated (BICI) is a decentralized firm with many autonomous divisions. The Business division's NOI last year was $87,350 and the average value
Businesscorp Industries Corp Incorporated (BICI) is a decentralized firm with many autonomous divisions. The Business division's NOI last year was $87,350 and the average value of its operating assets is $657,350. The division is looking for a new project to invest in. They fund new projects with debt and have a cost of debt of 7.5%. The division determines whether a potential project is acceptable based its residual income. If the Business division wants to invest $175,000 in a new project, what is the minimum amount of net operating income that the project must add to the division for the project to be worth investing in? A 1 Minimum additional net operating income B
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