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The Western Division of Claremont Company had net operating income of $154,000 and average invested assets of $563,000 . Claremont has a required rate of
The Western Division of Claremont Company had net operating income of $154,000 and average invested assets of $563,000. Claremont has a required rate of return of 15.25%. Western has an opportunity to increase operating income by $47,000 with a $97,000 investment in assets.
Compute Western Divisions return on investment and residual income currently and if it undertakes the project.
Currently Return on Investment (ROI) Residual Income (Loss) Proposed Project: Return on Investment (ROI) Residual Income (Loss)
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