An Investment Center Manager Is Considering Three Possible Investments

question 80

Essay

An investment center manager is considering three possible investments. The company's required return is 10%. The required asset investment, controllable margins, and the ROIs of each investment are as follows:
The investment center is currently generating an ROI of 25% based on $1,200,000 in operating assets and a controllable margin of $300,000.
Instructions
If the manager can select only one project, determine which one is the best choice to increase the investment center's ROI. Compute how much the investment center's ROI will be if the manager selects your recommendation.

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Definitions:

Situational Factors

External influences that can impact an individual's behavior or performance, such as environmental conditions, social pressures, or task characteristics.

Self-esteem

An individual's sense of their own value and worth.

Belief

The acceptance that something exists or is true, especially without proof.

Worth

The value or importance of something, often in terms of monetary, social, or personal significance.