Question
Paula Boothe, president of Culver Corporation, has mandated a minimum 8% ROI for any project undertaken by the company. Given the company's decentralization, Paula leaves
Paula Boothe, president of Culver Corporation, has mandated a minimum 8% ROI for any project undertaken by the company. Given the company's decentralization, Paula leaves all investment decisions to the divisional managers as long as they anticipate a minimum ROI of at least 10%. The Energy Drinks division has achieved a 16% ROI for the past three years. This year is not expected to be any different from the past three. Manager Martin Koch has just received a proposal to invest $3,000,000 in a new line of energy drinks that is expected to generate $360,000 in operating income. What is the return on investment expected on the new line of energy drinks?
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