Question
proposed investment 10 million 10 million controllable contribution from project 2 million 1.3 million Rate on investment of proposed investment 20% 13% Rate on investment
proposed investment 10 million 10 million
controllable contribution from project 2 million 1.3 million
Rate on investment of proposed investment 20% 13%
Rate on investment division at present 25% 9%
cost of capital for company is 15%
1) what decision will be made by management if they act in the best interest of their division?
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus
8th edition
77861620, 978-0077861629
