Solution-Calculate the return on investment expected on the

Calculate the return on investment expected on the new line

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Question - Paula Boothe, president of the Martinez Corporation, has mandated a minimum 9% 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 11%. The Energy Drinks division, under the direction of manager Martin Koch, has achieved a 14% 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 $2,600,000 in a new line of energy drinks that is expected to generate $312,000 in operating income. Calculate the return on investment expected on the new line of energy drinks.

Reference no: EM133006882

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Calculate the return on investment expected on the new line

Reference no: EM133006882

Reference no: EM133006882

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