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Current Attempt in Progress Paula Boothe, president of the Monty Corporation, has mandated a minimum 11% return on investment for any project undertaken by the
Current Attempt in Progress Paula Boothe, president of the Monty Corporation, has mandated a minimum 11% return on investment for any project undertaken by the company. Given the company's decentralization, Paula leaves all investment decisions to the divisional managers as long as they anticipate a minimum rate of return of at least 13%. The Energy Drinks division, under the direction of manager Martin Koch, has achieved a 18% return on investment for the past three years. This year is not expected to be different from the past three. Koch has just received a proposal to invest $2,100,000 in a new line of energy drinks that is expected to generate $315,000 in operating income. (a) Calculate the return on investment expected on the new line of energy drinks. (Round answer to 1 decimal place, e.g. 5.1%.) % Return on Investment
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