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 RI is used to evaluate divisional performance?
3-The management of Global Corporation?
A) 1
B) 2
C) 3
D) 4
E) 5
Correct Answer:
Verified
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