The Magellan Division of Global Corporation,which has income of $250,000 and an asset investment of $1,562,500,is studying an investment opportunity that will cost $450,000 and yield a profit of $67,500.Assuming that Global uses an imputed interest charge of 14%,would the investment be attractive to:
1-Divisional management if ROI is used to evaluate divisional performance?
2-Divisional management if residual income (RI)is used to evaluate divisional performance?
3-The management of Global Corporation?

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The Answer of The Magellan Division of Global Corporation,which has income of $250,000 and an asset investment of $1,562,500,is studying an investment opportunity that will cost $450,000 and yield a profit of $67,500.Assuming that Global uses an imputed interest charge of 14%,would the investment be attractive to:
1-Divisional management if ROI is used to evaluate divisional performance?
2-Divisional management if residual income (RI)is used to evaluate divisional performance?
3-The management of Global Corporation?

The Magellan Division of Global Corporation,which Has Income of $250,000