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i cannot get 1B 4a or 6 Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent.
i cannot get 1B 4a or 6
Wescott Company has three divisions: A, B, and C. The company has a hurdle rate of 8 percent. Selected operating data for the three divisions are as follows: Ants Sales revenue Cost of goods sold Miscellaneous operating expenses Interest and taxes Average invested assets Division A Division B Division C $ 1,280,000 $1,015,000 $1,000,000 791,000 745,000 732,000 69,000 57,000 58,000 53,000 46.000 46,000 9,165,000 2,165,000 3,562,000 eBook Print References Wescott is considering an expansion project in the upcoming year that will cost $5.5 million and return $499,000 per year. The project would be implemented by only one of the three divisions. Required: 1. Compute the ROI for each division 2. Compute the residual income for each division 3. Rank the divisions according to the ROI and residual income of each 4-a. Compute the return on investment on the proposed expansion project. 4-b. Is this an acceptable project? 5. Without any additional calculations, state whether the proposed project would increase or decrease each division's ROI 6. Compute the new ROI and residual income for each division if the project was implemented within that division Step by Step Solution
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