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It: Investment Center Evaluation (20 points) The Online division of Active Sports Corporation is an investment center. The division's margin is 8% and turnover is
It: Investment Center Evaluation (20 points) The Online division of Active Sports Corporation is an investment center. The division's margin is 8% and turnover is 3. a. Calculate the return on investment of the Online division. Ans: manager of the Online division is considering a new project (i.e., a new website in a foreign country) that requires an investment in assets of $80,000 and can generate $9,600 profit per year. What is the return on investment for the new project? Ans: If manager of the Online division is evaluated based on return on investment, will the c. manager invest in the new project? Yes No (Circle one) Why? d. If manager of the Online division is evaluated based on residual income using 10% as a minimum rate of return, what is the effect of adopting the new project as described in (b) on the division's total residual income? The division, total residual income will increase or decrease by $ (Circle one) If manager of the Online division is evaluated based on residual income, will the manager e. invest in the new project? Yes No (Circle one) Why? It: Investment Center Evaluation (20 points) The Online division of Active Sports Corporation is an investment center. The division's margin is 8% and turnover is 3. a. Calculate the return on investment of the Online division. Ans: manager of the Online division is considering a new project (i.e., a new website in a foreign country) that requires an investment in assets of $80,000 and can generate $9,600 profit per year. What is the return on investment for the new project? Ans: If manager of the Online division is evaluated based on return on investment, will the c. manager invest in the new project? Yes No (Circle one) Why? d. If manager of the Online division is evaluated based on residual income using 10% as a minimum rate of return, what is the effect of adopting the new project as described in (b) on the division's total residual income? The division, total residual income will increase or decrease by $ (Circle one) If manager of the Online division is evaluated based on residual income, will the manager e. invest in the new project? Yes No (Circle one) Why
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