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It is the end of the third quarter, and Nancy is evaluating the performance of two key divisions in the company. Both divisions had $50,000
It is the end of the third quarter, and Nancy is evaluating the performance of two key divisions in the company. Both divisions had $50,000 cash available for investment in the fourth quarter, so Nancy is now analyzing each division before a potential investment. company's minimum required rate of return is 10%, while its weighted average cost of capital is 7%. Its effective tax rate is 25% How much would each division need to generate in new operating income in the fourth quarter to reach the company's desired ROI of 13% at year-end, assuming each division uses its available $50,000 to purchase a new investment? Assume it is a $50,000 nondepreciable asset but still included in operating assets
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