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The Markham Division of World Corporation, which has income of $250,000 and an asset investment of $1,562,500, is studying an investment opportunity that will cost
The Markham Division of World Corporation, which has income of $250,000 and an asset investment of $1,562,500, is studying an investment opportunity that will cost $450,000 and yield a profit of $67,500. Assuming that World uses an imputed interest charge of 14%, would the investment be attractive to: 1Divisional management if ROI is used to evaluate divisional performance? 2-Divisional management if residual income (RI) is used to evaluate divisional performance? 3The management of Global Corporation? I A. B. Attractive to Markham: ROI Yes Yes Yes No No Attractive to Markham: RI Yes No No Yes Yes Attractive to World Corp. Yes No Yes Yes No Multiple Choice o Choice A o Choice B o Choice C o Choice D o Choice E
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