The Lager division of Suds Brewery has a current return on investment of 10%. The company...
The Lager division of Suds Brewery has a current return on investment of 10%. The company has established an 8% minimum rate of return for the division.The division's manager has two investment projects available, for which the following estimates have been made: Project A Annual Income = $24,000, operating assets = $400,000 Project B Annual Income = $60,000, operating assets = $550,000 Which Project should be funded?
Homework Answers
| Project A ROI = 24000/400000 = 6% | ||||
| Project B ROI = 60000/550000 = 10.91% or 11% | ||||
| Project B should be funded | ||||
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The Lager division of Suds Brewery has a current return on
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Please show all work to get answers.
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