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Waterway Division's operating results include: controllable margin of $216000, sales totaling $1800000, and average operating assets of $800000. Waterway is considering a project with sales
Waterway Division's operating results include: controllable margin of $216000, sales totaling $1800000, and average operating assets of $800000. Waterway is considering a project with sales of $100000, expenses of $86000, and an investment of average operating assets of $200000. Waterway's required rate of return is 9%. Should Waterway accept this project? Yes, ROl still exceeds the cost of capital. No, ROl will decrease to 7%. No, the return is less than the required rate of 9%. Yes, ROI will drop by 6.6% which is still above the minimum required rate of return
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