Business, 18.12.2019 03:31 cat20220

Paula boothe, president of the indigo corporation, has mandated a minimum 10% return on investment for any project undertaken by the company. given the company’s decentralization, paula leaves all investment decisions to the divisional managers as long as they anticipate a minimum rate of return of at least 10%. the energy drinks division, under the direction of manager martin koch, has achieved a 13% return on investment for the past three years. this year is not expected to be different from the past three. koch has just received a proposal to invest $1,800,000 in a new line of energy drinks that is expected to generate $234,000 in operating income.

calculate the residual income for the proposed new line of energy drinks.

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Paula boothe, president of the indigo corporation, has mandated a minimum 10% return on investment f...

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