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What will be the preference for taking on the proposed

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Daffodil Corporation, requires a minimum return on investment of 8% for any project to be carried out by the company. The company is decentralized and investment decisions are up to the judgment of the division managers as long as this ROI level is realized. Plant Division, has had a return on investment of 14% for the division for the past 3 years and believes the division continues to have the same return in the coming year .It also has the opportunity to invest in a new product that is projected to have an ROI of 12%.

Problem 1: If Daffodil Corporation evaluates managerial performance using return on investment, what will be the preference for taking on the proposed new product?

a. Daffodil will accept / Plant will reject

b. Daffodil will reject / Plant will accept

c. Daffodil will accept / Plant will accept

d. Daffodil will reject / Plant will reject

e. cannot be determined with the data given

 

Reference no: EM132743714

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