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Within a large rental corporation where the commercial rental segment dominated, Kenneth managed the residential rental segment. Kenneth enjoyed taking the underdog role, trying to
Within a large rental corporation where the commercial rental segment dominated, Kenneth managed the residential rental segment. Kenneth enjoyed taking the underdog role, trying to generate more income and higher returns than corporate expected. The corporate minimum required return was 8%, while its WACC was 7%. He recently became aware of new rental properties in a prime location. He assumed he'd be able to secure two key rental properties in his target area. He considered where his division stood in terms of profitability and asset position at year-end, and created a projection for the next year as follows. Calculate the ROI for Kenneth's residential division at the end of the current year and at the end of the following year, per his projections (where operating assets are considered investments). Assume that Kenneth is evaluated on generating a positivetrending ROI. (Round answers to 2 decimal places, e.g. 15.25\%.) Current ROI % Projected ROI %
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