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Suppose your team has been asked to consult a division manager of Audiotech Inc. related to the scenario described below. (This assignment is derived from
Suppose your team has been asked to consult a division manager of Audiotech Inc. related to the scenario described below. (This assignment is derived from Problem 11-40 at the end of Chapter 11.) Leslie Blandings, division manager of Audiotech, Inc., was debating the merits of a new product - a weather radio that would put out a warning if the county in which the listener lived were under a severe thunderstorm or tornado alert. The budgeted income of the division was $725,000 with operating assets of $3,625,000. The proposed investment would add income of $640,000 and would require an additional investment in equipment of $4,000,000. The minimum required return on investment for the company is 12%. Working individually
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