Question
Grusov Company has operating assets of $16,000,000. The companys operating income for the most recent accounting period was $1,920,000. The Marsh Division of Grusov controls
Grusov Company has operating assets of $16,000,000. The companys operating income for the most recent accounting period was $1,920,000. The Marsh Division of Grusov controls $6,000,000 of the companys assets and earned $840,000 of its operating income. Grusov's desired ROI is 10 percent. Grusov has $750,000 of additional funds to invest. The manager of the Marsh division believes that his division could earn $93,750 on the additional funds. The highest investment opportunity to any of the companys other divisions is 11 percent. Required:
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