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Question - Paula Boothe, president of the Flint Corporation, has mandated a minimum 8% return on investment for any project undertaken by the company. Given the company's decentralization, Paula leaves all investment decisions to the divisional managers as long as they anticipate a minimum rate of return of at least 10%. The Energy Drinks division, under the direction of manager Martin Koch, has achieved a 17% return on investment for the past three years. This year is not expected to be different from the past three. Koch has just received a proposal to invest $3,000,000 in a new line of energy drinks that is expected to generate $360,000 in operating income.
Required - Calculate the return on investment expected on the new line of energy drinks.
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Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs for pricing and other purposes
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