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:

Quantitative Approach

refers to a research or analysis method that focuses on quantifying patterns, behaviors, or phenomena using statistical, mathematical, or numerical data.

Managerial Judgement

The process by which managers make decisions based on a combination of factors including data analysis, experience, and intuitive understanding.

Mathematical Solutions

Answers or outcomes derived through the application of mathematical methods and reasoning.

Self-actualisation Needs

The highest level in Maslow's hierarchy of needs, representing the fulfillment of personal potential and self-fulfillment.