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Please see the text book question below in 2020SP1-ACCT-2010-02: x | Er. Connect - Sign In M MHE Reader BibMe: Free Modern Lan X +

Please see the text book question below

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in 2020SP1-ACCT-2010-02: x | Er. Connect - Sign In M MHE Reader BibMe: Free Modern Lan X + O X C D player-ui.mheducation.com/#/epub/sn_6c83#epubcfi(%2F6%2F856%5Bdata-uuid-c9092fe94ba34. O a PROBLEM 25.5A ROI and Residual Income LO25-2 2 , LO25-3 2 , LO25-4 8 Bob Banker is the manager of one location of the Fastwhere Inc. chain, which is a delivery service. Banker's location is currently earning an ROI of 14 percent on existing average capital of $750,000. The minimum required return for Fastwhere Inc. is 12 percent. Banker is considering several additional investment projects, which are independent of existing operations and are independent of each other. The following table lists the projects. Project Required Capital ROI A-1 $150,000 14.19% A-2 300,000 20.0% A-3 250,000 13.5% A-4 400,000 12.5% A-5 500,000 9.8% Instructions Page 1105 a. Which of the projects would Banker choose for investment if his objective were to maximize his location's ROI? b. Which projects increase the value of Fastwhere Inc.? c. Which projects have a negative residual income? d. Create two rankings for the projects in order of acceptability if Banker is evaluated (1) on ROI and (2) on residual income. e. On the basis of the projects in the list explain why underinvestment is a problem when using ROI for evaluation purposes. PROBLEM 25.6A Balanced Scorecard in the Assembly Department iirii LO25-5Q, LO25-60

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