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RentalServices.com Corporation provides business-to-business services. Data concerning the most recent year appear below: Sales Net operating income Average operating assets $ 3,000,000 $ 150,000 $
RentalServices.com Corporation provides business-to-business services. Data concerning the most recent year appear below: Sales Net operating income Average operating assets $ 3,000,000 $ 150,000 $ 750,000 Henry is a senior manager at RentalServices.com and she will retire next year for her personal reasons. Henry's compensation is tied to ROI. His team members, consisting of junior managers, recently conducted market research and concluded the following: acquiring SmallRental.com, a small local company, will lead to $250,000 increase in average operating assets in the first year of acquisition, but $2,000,000 increase in sales and $500,000 increase in net operating income in the second year of acquisition but no change in sales and net operating income in the first year of acquisition. Although Henry believes that acquiring SmallRental.com is a profitable investment project, he is concerned about the potential negative impact of the investment on ROI and his compensation as the investment return is expected to realize in the 2 year (after he retires). As such, he decides not to report this potential investment opportunity to the senior executives at RentalServices.com. Do you think it is ethical for Henry not to inform this investment opportunity to the senior executives? Why or why not
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