The Jewelry Division of Genuine Gems Company is considering an investment in a new project.The project has an estimated cost of $1,000,000.If Genuine Gems Company has a target rate of return of 12%,how large does the return on investment on this project need to be to generate $150,000 of residual income?

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The correct answer is D. The return on investment (ROI) needed to generate $150,000 of residual income is 27%. This is calculated as follows:ROI = (Residual income / Investment) * 100ROI = ($150,000 / $1,000,000) * 100ROI = 15%However, the target rate of return is 12%, so the ROI needed to generate $150,000 of residual income is 15% + 12% = 27%.

The Jewelry Division of Genuine Gems Company Is Considering an Investment