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The Monarch Division of Allgood Corporation has a current ROI of 15 percent. The company target ROI is 11 percent The Monarch Division has an
The Monarch Division of Allgood Corporation has a current ROI of 15 percent. The company target ROI is 11 percent The Monarch Division has an opportunity to invest $3,300,000 at 13 percent but is reluctant to do so because its Rol will fall to 14 40 percent. The present investment base for the division is $7700,000 Required a. Calculate the current residual income and the residual income with the new investment opportunity being included b. Based on your answers to requirement a should Monarch Division make the investment? Current residual income New residual income b: Should Monarch Division make the investment
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