Selected data for three investment centers of Going Coastal, Inc., a manufacturer of beach chairs, are given below for the previous operating period:

	Water	Sun	Sand
Sales Revenue	$60,000	$100,000	$80,000
Capital	$10,000	$50,000	$20,000
Operating Income	$1,600	$9,000	$1,800

An investment opportunity has been identified that will yield a 17% return on investment for each center. The company's minimum acceptable rate of return is 15%.Which of the following statements is incorrect?

A.

Sand's ROI is less than the company's hurdle rate.

B.

If residual income is used to award bonuses, the managers of all three centers will accept the investment opportunity.

C.

If each manager is paid a bonus based solely on his ability to exceed the division's prior period ROI, then two of the managers will accept the opportunity.

D.

If each manager is paid a bonus based solely on his ability to exceed the division's prior period ROI, Sun's manager would make a decision that is in the company's "best interest."

E.

Water's manager is the most effective in terms of generating sales revenue from invested capital.