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Coronado Division's operating results include: controllable margin of $192000, sales totaling $1200000, and average operating assets of $600000. Coronado is considering a project with sales
Coronado Division's operating results include: controllable margin of $192000, sales totaling $1200000, and average operating assets of $600000. Coronado is considering a project with sales of $100000, expenses of $88000, and an investment of average operating assets of $200000. Coronado's required rate of return is 8%. Should Coronado accept this project? Yes, ROI will drop by 6.6% which is still above the minimum required rate of return. Yes, ROI still exceeds the cost of capital. No, the return is less than the required rate of 8%. No, ROI will decrease to 6%. Coronado Division's operating results include: controllable margin of $192000, sales totaling $1200000, and average operating assets of $600000. Coronado is considering a project with sales of $100000, expenses of $88000, and an investment of average operating assets of $200000. Coronado's required rate of return is 8%. Should Coronado accept this project? Yes, ROI will drop by 6.6% which is still above the minimum required rate of return. Yes, ROI still exceeds the cost of capital. No, the return is less than the required rate of 8%. No, ROI will decrease to 6%
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