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The following information pertains to a segment of the Marian Company. Invested capital is defined as total assets. The weighted average cost of capital is
The following information pertains to a segment of the Marian Company. Invested capital is defined as total assets. The weighted average cost of capital is 10%. The ROI of the segment before the project is 20%. The ROI of the segment after the project is 18%. The manager is evaluated based on the segment's economic profit. A project earning a ROI of 12% should be ________.
1. accepted
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2. rejected
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3. compared to the company's ROI
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4. compared to the company's residual income |
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