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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

image text in transcribed

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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