Lounsbury Parts Has a Current Return on Investment of 10

question 10

Multiple Choice

Lounsbury Parts 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 = $24,000, operating assets = $400,000
Project B - Annual controllable margin = $60,000, operating assets = $550,000
Which project should be funded?

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

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Definitions:

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Opinions or perspectives held by individuals.

Tradition Influence

The impact that long-established beliefs, customs, and practices have on individuals or societies.

Law Enforcement

The system through which members of society act in an organized manner to enforce the law by discovering, deterring, rehabilitating, or punishing people who violate the rules and norms governing that society.

Categorical Imperative

A concept in moral philosophy developed by Immanuel Kant, stating that one should act only according to that maxim by which one can at the same time will that it should become a universal law.