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Compute the roi and ri for this division

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Reference no: EM13513657

The Pip division has the following operating data:

Operating assets

$200,000

Operating income

$ 50,000

Minimum required rate of return

16%

1. Compute the ROI and RI for this division.

2. Assume that the Pip division is presented with an investment project yielding a 20 percent return on its investment requiring a cash outlay of $30,000. Would the manager of the Pip division accept this investment under the ROI approach? How about under the RI approach?

 

Reference no: EM13513657

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