Red Earth Company has two divisions,the Okla Division and the Homa Division.Last year,the Okla Division earned $66,000 using average operating assets of $550,000.Last year,the Homa Division earned $260,000 using average operating assets of $2,000,000.Minimum required rate of return for Red Earth is 9 percent.
Now assume that the minimum required rate of return for Red Earth is 12 percent.

Question

Red Earth Company has two divisions,the Okla Division and the Homa Division.Last year,the Okla Division earned $66,000 using average operating assets of $550,000.Last year,the Homa Division earned $260,000 using average operating assets of $2,000,000.Minimum required rate of return for Red Earth is 9 percent.
  Now assume that the minimum required rate of return for Red Earth is 12 percent.

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The Answer of Red Earth Company has two divisions,the Okla Division and the Homa Division.Last year,the Okla Division earned $66,000 using average operating assets of $550,000.Last year,the Homa Division earned $260,000 using average operating assets of $2,000,000.Minimum required rate of return for Red Earth is 9 percent.
  Now assume that the minimum required rate of return for Red Earth is 12 percent.

Red Earth Company Has Two Divisions,the Okla Division and the Homa