Consider the following data from two divisions of a company, P and Q:
$\begin{array}{lrrrr}
\text { Divisional } &{\mathrm{P}} & \mathrm{Q} \
\text { Sales } & \$ 1,500,000 & \$ 1,000,000 \
\text { Operating Income } & \$ 600,000 & \$ 450,000 \
\text { Investment } & \$ 4,000,000 & \$ 2,750,000
\end{array}$If both divisions were presented with an opportunity to invest in a project that is estimated to achieve an ROI of 15%, what will the units likely decide?
A) Division P will invest; Division Q will not invest.
B) Division P will invest; Division Q will be indifferent.
C) Division P will not invest; Division Q will invest.
D) Division P will be indifferent; Division Q will not invest.
E) Neither unit will invest in the projects.

Question

Consider the following data from two divisions of a company, P and Q:
$\begin{array}{lrrrr}
\text { Divisional } &{\mathrm{P}} &  \mathrm{Q} \
\text { Sales } & \$  1,500,000 & \$  1,000,000 \
\text { Operating Income } & \$  600,000 & \$  450,000 \
\text { Investment } & \$  4,000,000 & \$  2,750,000
\end{array}$If both divisions were presented with an opportunity to invest in a project that is estimated to achieve an ROI of 15%, what will the units likely decide?
A) Division P will invest; Division Q will not invest.
B) Division P will invest; Division Q will be indifferent.
C) Division P will not invest; Division Q will invest.
D) Division P will be indifferent; Division Q will not invest.
E) Neither unit will invest in the projects.

Quizplus · Accepted Answer

The Answer of Consider the following data from two divisions of a company, P and Q:
$\begin{array}{lrrrr}
\text { Divisional } &{\mathrm{P}} &  \mathrm{Q} \
\text { Sales } & \$  1,500,000 & \$  1,000,000 \
\text { Operating Income } & \$  600,000 & \$  450,000 \
\text { Investment } & \$  4,000,000 & \$  2,750,000
\end{array}$If both divisions were presented with an opportunity to invest in a project that is estimated to achieve an ROI of 15%, what will the units likely decide?
A) Division P will invest; Division Q will not invest.
B) Division P will invest; Division Q will be indifferent.
C) Division P will not invest; Division Q will invest.
D) Division P will be indifferent; Division Q will not invest.
E) Neither unit will invest in the projects.

Consider the Following Data from Two Divisions of a Company