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
Operating Income	$1,600	$9,000	$1,800
Capital	$10,000	$50,000	$20,000

An investment opportunity has been identified that will yield a 10% return on investment for each center. The companys minimum acceptable rate of return is 12%.

Which of the following statements is correct?

A.

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

B.

If each manager is paid a bonus based solely on his ability to exceed the divisions prior period ROI, Sands manager would make a decision that is in the companys best interest.

C.

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

D.

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

E.

More than one of the above statements is correct.