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Sandals Company has the following information about its two divisions. The divisions are investment centers. Sandals required rate of return is 5%. Audio Division Outdoors
Sandals Company has the following information about its two divisions. The divisions are investment centers. Sandals required rate of return is 5%. Audio Division Outdoors Division Contribution to Indirect Expenses $1,400,000 $2,000,000 Sales $10,000,000 $12,500,000 Invested capital $15,000,000 $17,500,000 An opportunity is available that yields an expected income of $1,000,000 on an investment of $10,000,000. If the divisions are evaluated based on return on investment, which will accept the opportunity?
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