Question
Selected sales and operating data for three divisions of three different companies are given? below: Division? A, Company 1 Division? B, Company 2 Division? C,
Selected sales and operating data for three divisions of three different companies are given? below:
Division? A, Company 1 | Division? B, Company 2 | Division? C, Company 3 | |
Sales for the Division | ?$60,000 | ?$100,000 | ?$80,000 |
Income for the Division | ?$3,000 | ?$9,000 | ?$1,800 |
Capital Invested in the Division | ?$15,000 | ?$50,000 | ?$20,000 |
Company Hurdle Rate | ?15% | ?18% | ?12% |
Each division is presented with an investment opportunity that would yield a rate of return of? 16%.
If performance is being measured by Return on
Investment?,
which division or divisions will probably accept the? opportunity?
A.
Division? C, Company 3 only
B.
Division? A, Company? 1, Division? B, Company? 2, and Division? C, Company 3
C.
Division? A, Company 1 only
D.
Division? A, Company 1 and Division? C, Company 3
E.
Division? B, Company 2 and Division? C, Company 3
Selected sales and operating data for three divisions of three different companies are given below: Division ADivision B,Division C, Company1 Company 2Company 3 Sales for the Division Income for the Division Capital Invested in the Division Company Hurdle Rate $60,000 $3,000 $15,000 15% $100,000 $9,000 $50,000 18% $80,000 $1,800 $20,000 12% Each division is presented with an investment opportunity that would yield a rate of return of 16% If performance is being measured by Return on Investment, which division or divisions will probably accept the opportunity? A. Division C, Company 3 only O B. Division A, Company 1, Division B, Company 2, and Division C, Company 3 C. Division A, Company 1 only 0 D. Division A, Company 1 and Division C, Company 3 0 E, Division B, Company 2 and Division C, Company 3
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