Question
This is not my work it's assistance with homework. Monster Mash produces Computer Games. The Explosion Division uses $112,500 in Operating Assets. Their Operating Income
This is not my work it's assistance with homework.
Monster Mash produces Computer Games. The Explosion Division uses $112,500 in Operating Assets. Their Operating Income was $30,375 from Sales of $202,500. Mash offered the manager of the Explosion Division an opportunity to use new explosive effect software costing $100,000. The ROI of the new software is expected to be 18%. Mash has a desired ROI of 15%.
What will the manager of the Explosion Division most likely do assuming s/he is evaluated based on ROI? (hint - calculate current ROI)
a.Reduce the amount of assets used in their division.
b.Not invest in the software, even though it will increase divisional ROI.
c.Invest in the new software to increase operating income
d.Suboptimize, choosing not to use the new software.
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Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer And Timothy Doupnik
15th Edition
1264798482, 9781264798483
