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Division CKN and Division MGL reported the following information: Net operating income Average operating assets CKN $108,000 $900,000 MGL $102,000 $600,000 The minimum required rate
Division CKN and Division MGL reported the following information: Net operating income Average operating assets CKN $108,000 $900,000 MGL $102,000 $600,000 The minimum required rate of return for both divisions is 15%. Both divisions are evaluating an investment project that has the following information: Net operating income Average operating assets CKN $ 21,000 $150,000 MGL $ 36,000 $225,000 Assuming the divisional managers are being evaluated based on return on investment (ROI), would these divisions most likely accept or reject their projects? O Division CKN = accept: Division MGL = accept O Division CKN = reject; Division MGL = reject O Division CKN = accept; Division MGL = reject O Division CKN = reject: Division MGL = accept
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