Beach Corporation has a return on investment of 15%. A Beach division, which currently has a 13% ROI and $750,000 of residual income, is contemplating a massive new investment that will (1) reduce divisional ROI and (2) produce $120,000 of residual income. If Beach strives for goal congruence, the investment:
A) should not be acquired because it reduces divisional ROI.
B) should not be acquired because it produces $120,000 of residual income.
C) should not be acquired because the division's ROI is less than the corporate ROI before the investment is considered.
D) should be acquired because it produces $120,000 of residual income for the division.
E) should be acquired because after the acquisition, the division's ROI and residual income are both positive numbers.
Correct Answer:
Verified
Q23: A company's sales margin:
A) must, by definition,
Q24: A division's return on investment may be
Q25: Which of the following is used in
Q26: Jamison Company had sales revenue and operating
Q27: The information that follows relates to Khan
Q29: Tempest Enterprises had a sales margin of
Q30: Capital turnover shows:
A) the income generated by
Q31: The basic idea behind residual income is
Q32: Which of the following is not considered
Q33: ROI is most appropriately used to evaluate
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents