3. As CFO, you are trying to allocate investment funds across your threedivision firm. You observe the

Question:

3. As CFO, you are trying to allocate investment funds across your threedivision firm. You observe the revenues last year as $2.0 billion, $1.5 billion, and $1.5 billion, respectively, for Divisions A, B, and C. Using these figures, you assume that Divisions A, B, and C should have investment budgets of 40, 30, and 30 percent, respectively, of the overall firm’s investment budget for the year. What might be problematic about this approach?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Valuation Measuring And Managing The Value Of Companies University Edition

ISBN: 978-1118873731

6th Edition

Authors: Mckinsey & Company Inc. ,Tim Koller ,Marc Goedhart ,David Wessels

Question Posted: