Sunrise Corporation has a ROI of 13%. One of its divisions, which currently has a...
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Sunrise Corporation has a ROI of 13%. One of its divisions, which currently has a 15% ROI and $750,000 of residual income (RI), is given the opportunity to invest in a project. The project will reduce the division's ROI but produce $120,000 of residual income. If Sunrise strives for goal congruence, the investment:
Multiple Choice
should not be acquired because the division's ROI and RI give different results
should not be acquired because the division's ROI is already higher than the overall corporation's ROI
should not be acquired as there is an opportunity cost to Sunrise
should not be acquired because it reduces divisional ROI
should be acquired because it produces an additional $120,000 of RI for the corporation
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