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Use the following information to answer the next three questions: The Cattle Division of Farm Ltd. reported the following information: $ Sales Return on investment
Use the following information to answer the next three questions: The Cattle Division of Farm Ltd. reported the following information: $ Sales Return on investment (ROI) Residual income Minimum required rate of return $ 630.000 30% 70,000 16% A new project has been proposed to the Cattle Division requiring an investment in assets of $180,000. The project will increase sales by $350,000 and increase operating income by $45,000. 17 What is the Return on investment (RO for the proposed new project? Select one 410% b. 30 ON c389% d. 25 0% 18 What is the Residual income (R) for the proposed new project? Select one a 5 (11000 b 5 33.800 c50.000) O d 5 16,200 19 Assume the Return on investment (ROI) for the proposed project is 29% Using Rol results only. The proposed project would be Selecione a Accepled because ROI on the project is less than the current ROI for the division b Rejected because ROI on the project is less than the current Rol for the division Rejected because of is greater than d. Accepted because ROI is greater than
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