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Required information Axel Corporation (which has a weighted average cost of capital of 12%) has two divisions with the following information: Beta Division Cal Division
Required information Axel Corporation (which has a weighted average cost of capital of 12%) has two divisions with the following information: Beta Division Cal Division Total Assets $720,000 $550,000 Current Liabilities $220,000 $110,000 After-Tax Operating Income $105,000 $110,000 15% 20% ROI Which of the following is true? Multiple Choice O Beta is more profitable than Cal, but Cal is generating a greater return relative to its resources than Beta. O Cal is more profitable than Beta, but Beta is generating a greater return relative to its resources than Cal. O C) Beta is more profitable and has a higher EVA than Cal. O Beta has a lower ROI but a higher EVA than Cal
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