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Division C of the CCC Group is considering a project which will increase annual profit by $45,000, but will require average inventory levels to increase
Division C of the CCC Group is considering a project which will increase annual profit by $45,000, but will require average inventory levels to increase by $180,000. The current return on investment for the division is 26%, and the imputed interest cost of capital is 20%. Would the performance measures of ROI and RI motivate the manager of Division C to act in the interest of the company as a whole?
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No the performance measures of ROI and RI alone would not necessarily motivate the manager of Divisi...
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Cost Management A Strategic Emphasis
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
6th Edition
78025532, 978-0077523732, 77523733, 978-0078025532
