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Super Neat Snacks has two divisions, Chips and Cookies. The managers of each division are evaluated based on Residual Income. They are each given

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Super Neat Snacks has two divisions, Chips and Cookies. The managers of each division are evaluated based on Residual Income. They are each given the opportunity to invest in a new project. Information about the divisions and projects appear below. Chips Cookies Net Operating $10,000 $12,000 Income Avg. Operating $100,000 $100,000 Assets Return on 10% 12% Investment| New Project 11% 11.5% ROI Suppose the firm's cost of capital is 10.5%. Will the managers of Chips and Cookies accept or reject the new project, based on how they are evaluated? Chips: Accept; Cookies: Reject Chips: Accept; Cookies: Accept Chips: Reject; Cookies: Reject Chips: Reject; Cookies: Accept

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