Le Sud Retailers Has a Current Return on Investment of 10

question 85

Multiple Choice

Le Sud Retailers has a current return on investment of 10% and the company has established an 8% minimum rate of return for the division. The division manager has two investment projects available for which the following estimates have been made:
Project A - Annual controllable margin = $24000 operating assets = $400000
Project B - Annual controllable margin = $60000 operating assets = $550000
Which project should be funded?

• A) Both projects
• B) Project A
• C) Project B
• D) Neither project

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