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THIS IS MY HOMEWORK QUESTION: current ROI of 12 percent target ROI is 8 percent. opportunity to invest $3,000,000 at 10 percent but is reluctant

THIS IS MY HOMEWORK QUESTION:

current ROI of 12 percent

target ROI is 8 percent.

opportunity to invest $3,000,000 at 10 percent but is reluctant to do so because its ROI will fall to 11.50 percent. The present investment base for the division is $9,000,000.

Q1: What is the current RI and RI with investment?

Q2: Should the company make the investment?

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