Question
I need this done in hour please Kelfour Enterprises has divided its operations into two divisions. Relevant accounting data for each division is as follows:
Kelfour Enterprises has divided its operations into two divisions. Relevant accounting data for each division is as follows: |
Divisions | Sales | Operating Assets | Operating Income |
Western Division | $ 150,000 | $ 100,000 | $ 15,000 |
Eastern Division | $ 300,000 | $ 150,000 | $ 16,500 |
Kelfour has an additional $50,000 of funds to invest. The manager of the Western Division believes that she can invest the funds at a rate of return (ROI) of 14% while the manager of the Eastern Division has found a new investment opportunity that is expected to yield a 12% ROI. Currently Kelfour uses ROI as the sole measure of managerial performance. Based on this information |
The manager of the Western division is likely to reject an offer to have the funds invested her department. |
The manager of the Eastern division is likely to accept an offer to have the funds invested his department. |
The CEO of Kelfour is likely to favor having the funds invested in the Western Division. |
All of the answers represent true statements.
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