Wescott Company has three divisions: A B and C The company has a hurdle rate of percent. Selected operating data for the three divisions are as follows:
Division A Division B Division C
Sales revenue $ $ $
Cost of goods sold
Miscellaneous operating expenses
Interest and taxes
Average invested assets
Wescott is considering an expansion project in the upcoming year that will cost $ million and return $ per year. The project would be implemented by only one of the three divisions. Compute the new ROI and residual income for each division if the project was implemented within that division.
