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Dax Pet Foods compiled the following information for the year for its dog division: Average operating assets= $3,500,000; Controllable margin= 315,000; Dax's corporate office expects
Dax Pet Foodscompiled the following information for the year for its dog division: Average operating assets= $3,500,000; Controllable margin= 315,000; Dax's corporate office expects the division to earn a minimum return of 8%. Suppose the dog division invests in a new machine that will produce a new dog food product. The machine is expected to generate $19,500 of controllable profit and will cost $150,000. If Dax buys the new machine, what happens to ROI? The answer is it will increase to 9.16%. How do you get this answer?
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