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Saxwell Corporation has many divisions and evaluates them using ROI. The corporation's expected ROI for each division is 14 percent or above. Earnings Investment base
Saxwell Corporation has many divisions and evaluates them using ROI. The corporation's expected ROI for each division is 14 percent or above. Earnings Investment base Division 1 $ 720,000 6,000,000 Division 2 $ 2,400,000 15,000,000 Assume that the manager of division 2 has the opportunity to purchase a new piece of equipment for $3,000,000 that would increase earnings by $300,000 per year. a. Show the impact of this purchase on division 2's ROI. b. Would the manager of division 2 be motivated to undertake the investment
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