Question
Dave Inc.s cost of capital is 12%. The company has provided you with a summary of its annual reports from two of its divisions: Division
Dave Inc.s cost of capital is 12%. The company has provided you with a summary of its annual reports from two of its divisions:
|
| Division A | Division B |
| Capital invested | $3862 | $7564 |
| Net Income | $2165 | $2991 |
The manager of Division B is considering a proposal for a new investment that will have the following incremental income and assets over the coming year:
|
| Income | $416 |
|
| Assets | 2599 |
If the proposal were accepted, what would Division Bs ROI be?
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Introduction To Managerial Accounting
Authors: Peter C. Brewer
Custom Edition
0077842987, 978-0077842987
