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Dingo Division's operating results include: controllable margin of $100,000, sales totaling $1,200,000, and investment of...

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Accounting

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Dingo Division's operating results include: controllable margin of $100,000, sales totaling $1,200,000, and investment of average operating assets of $500,000. Dingo is considering a project with sales of $120,000, controllable margin of $30.000, and an investment of average operating assets of $200,000. Dingo's minimum required rate of return is 12%. Required: 1. If Dingo Division is evaluated based on ROI, would the division accept this project? Calculate the current ROI and the ROI with the new project and comment. (5 marks) 2. If Dingo Division is evaluated based on residual income, would the division accept this project? Calculate the current RI and the RI with the new project and comment. ( 5 marks)

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