Return of the investment proposal exceeds Brantford Companys required rate of return.
	Manager of the St. John's division would accept the investment proposal as there will be an increase in his bonus.
	Manager of the Ottawa division would accept the investment proposal as there will be an increase in his bonus.
	Manager of the Regina division would accept the investment proposal as there will be an increase in his bonus.

Question 10 (2 points) Brantford Company has two sources of funds - long-term debt with a market and book value of $9 million issued at an interest rate of 10 percent, and equity capital that has a market value of $6 million (book value of $2 million). Brantford Company has profit centres in the following locations with the following data. The cost of equity capital is 15 percent, while the tax rate is 30 percent. Current Operating Income Before Tax Total Assets Liabilities Ottawa $ 480,000 $2,000,000 $100,000 St. Johns $ 600,000 $4,000,000 $300,000 Regina $1,020,000 $6,000,000 $600,000 Brantford Company uses return on investment (operating income before tax/total assets) in evaluating the performance of the profits centres as well as determining the bonus for the managers. There is a new proposal which required an investment of $500,000 with an expected operating income before tax of $100,000. Given Brantford's required rate of return of 12%, which of the following statements is FALSE? Return of the investment proposal exceeds Brantford Company's required rate