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:

Fluid intelligence

The ability to think logically and solve problems in novel situations, independent of acquired knowledge.

Prospective memory

The aspect of memory that involves remembering to perform a planned action or intention at the appropriate time.

Retrospective memory

The ability to remember information and events from the past, including facts, experiences, and people.

Cross-linking theory

A theory in biology and chemistry describing how chemical bonds form between different parts of a molecule or between molecules, affecting properties like elasticity in tissues.