The income from operations and amount of invested assets in each division of NOVEMBER INDUSTRIES...
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Accounting
The income from operations and amount of invested assets in each division of NOVEMBER INDUSTRIES are as follows: REQUIRED: 1) Assume that management is evaluating divisional performance using ROI. Compute the ROI for each division. 2) Which division is the most profitable per dollar invested? 3) Assume that an investment opportunity has become available for the company that will require an investment of $1,000,000. Management has a required rate of return of 15%. This will not benefit the Sporting Goods division, so it will be shared equally by Healthcare division and Commercial division. Management estimates that additional income of $200,000 will be generated by this investment, thus, they estimate that it will have a ROI of 20%. a) From the standpoint of the company overall, is this a good investment or not? WHY? b) From the standpoint of the individual divisions, is this a good investment? Are the managers of the divisions in favor, yes or no and WHY
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