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The Atlantic Region of Scenic Industries is considering a new tracking system to increase efficiency. The regions most recent annual income was $900,000 with average
The Atlantic Region of Scenic Industries is considering a new tracking system to increase efficiency. The regions most recent annual income was $900,000 with average operating assets of $3,200,000. Operating income would increase by $300,000 with the new investment, which would cost $1,800,000. Should the investment be made if the required rate of return is 12%?
A. No, ROI is 6%, which is less than 12%.
B. Yes, ROI is 48.0%, which is greater than 12%.
C. Yes, ROI is 29.3%, which is greater than 12%.
D. No, ROI is 9%, which is less than 12%.
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