E10-36B (similar to) Question Help Donaldson Ceramics, a division of Gammaro Corporation, has an operating income of $54,000 and total assets of $432,000 The required rate of return for the company is 9%. The company is evaluating whether it should use roturn on investment (ROI) or residual income (RI) as a measurement of performance for its division managers. The manager of Donaldson Ceramics has the opportunity to undertake a new project that will require an investment of $108,000. This investment would earn $10.800 for the company Read the requirements Requirement 1. What is the original return on investment (ROI) for Donaldson Ceramics (before making any additional investment First determine the formula to calculate the ROL ROU Requirements 1. What is the onginal return on investment (Roly for Donaldson Ceramics Delore making any additional investment? 2. What would the ROI be for Donaldson Ceramics it this investment opportunity were undertakan? Would the manager of the Donaldson Ceramics division want to make this investment she wore evaluated based on ROI? Why or why not? 3. What is the ROI of the investment opportunity Would the investment be desirable from the standpoint of Gammaro Corporation? Why or why not? 4. What would the residual income (RI) be for Donaldson Ceramics if this investment opportunity were to be undertaker? Would the manager of the Donaldson Ceramics division want to make this investment if she were evaluated based on RI? Why or why not? 5. What is the Rl of the investment opportunity? Would the investment be desirable from the standpoint of Gammaro Corporation? Why or why not? 6. Which performance measurement method, Rolor Ripromoton goal congruence? Why? Print Done 12 remorro Clear All Check Answer Type here to search 2 6 E10-36B (similar to) Question Help Donaldson Ceramics, a division of Gammaro Corporation, has an operating income of $54,000 and total assets of $432,000 The required rate of return for the company is 9%. The company is evaluating whether it should use roturn on investment (ROI) or residual income (RI) as a measurement of performance for its division managers. The manager of Donaldson Ceramics has the opportunity to undertake a new project that will require an investment of $108,000. This investment would earn $10.800 for the company Read the requirements Requirement 1. What is the original return on investment (ROI) for Donaldson Ceramics (before making any additional investment First determine the formula to calculate the ROL ROU Requirements 1. What is the onginal return on investment (Roly for Donaldson Ceramics Delore making any additional investment? 2. What would the ROI be for Donaldson Ceramics it this investment opportunity were undertakan? Would the manager of the Donaldson Ceramics division want to make this investment she wore evaluated based on ROI? Why or why not? 3. What is the ROI of the investment opportunity Would the investment be desirable from the standpoint of Gammaro Corporation? Why or why not? 4. What would the residual income (RI) be for Donaldson Ceramics if this investment opportunity were to be undertaker? Would the manager of the Donaldson Ceramics division want to make this investment if she were evaluated based on RI? Why or why not? 5. What is the Rl of the investment opportunity? Would the investment be desirable from the standpoint of Gammaro Corporation? Why or why not? 6. Which performance measurement method, Rolor Ripromoton goal congruence? Why? Print Done 12 remorro Clear All Check Answer Type here to search 2 6
