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dingo divisions operating results include operating income $100,000 sales totaling$1,200,000 investment of average operating assets $500,000 A C D E G H 2. Question 3

dingo divisions operating results include

operating income $100,000 sales totaling$1,200,000 investment of average operating assets $500,000

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A C D E G H 2. Question 3 - Performance Evaluation - Version B (10 marks) Dingo Division's operating results include: operating income of $100,000, sales totaling $1,200,000, and investment of average operating Dingo is considering a project with sales of $120,000, operating income of $30,000, and an investment of average operating assets of $2 Dingo's minimum required rate of return is 12%. Required: 1. If Dingo Division is evaluated based on ROI, would the division accept this project? Calculate the current ROI and the ROI with the new project and comment. (4 marks) 2. If Dingo Division is evaluated based on residual income, would the division accept this project? Calculate the current Rl and the Rl with the new project and comment

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