Dingo Division's Operating Results Include: Controllable Margin of $150000 Sales

question 127

Multiple Choice

Dingo Division's operating results include: controllable margin of $150000 sales totaling $1200000 and average operating assets of $500000. Dingo is considering a project with sales of $100000 expenses of $86000 and an investment of average operating assets of $200000. Dingo's required rate of return is 9%. Should Dingo accept this project?

• A) Yes ROI will drop by 6.6% which is still above the minimum required rate of return.
• B) No the return is less than the required rate of 9%.
• C) Yes ROI still exceeds the cost of capital.
• D) No ROI will decrease to 7%.

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Definitions:

Easement

A legal right to use another's land for a specific limited purpose without owning it.

Orally

Expressed in spoken rather than written words; pertaining to verbal communication.

Access

The ability or right to enter, approach, or use something, such as a building, information, or a service.

Period of Years

A specified duration or length of time, often used in legal contexts to describe the term of a contract or agreement.