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Zarkon Industries is a division of ACME Corporation. A VP at Zarkon has recommended a new project to the CEO of Zarkon. The potential new
Zarkon Industries is a division of ACME Corporation. A VP at Zarkon has recommended a new project to the CEO of Zarkon. The potential new project is expected to provide income of $35,000,000 and expected to require an average investment of $250,000,000. ACME Corporation requires that all new projects provide a return on investment (ROI) of at least 8% ACME presently has an ROI of 11% Zarkon Industries division presently has an ROI of 16% Required: 1. Compute the expected return on investment on the potential project. 2. Do you believe the CEO of ACME, the parent company of Zarkon, would want the project accepted? Explain 3. Do you believe the CEO of Zarkon should accept the project? Explain. Why might the CEO of Zarkon o decide to reject the project
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