Familia Inc

question 47

Essay

Familia Inc.reported the following results from last year's operations:
At the beginning of this year,the company has a $1,200,000 investment opportunity with the following characteristics:
The company's minimum required rate of return is 13%.
Required:
1.What was last year's return on investment (ROI)? (Round to the nearest 0.1%.)
2.What is the ROI related to this year's investment opportunity? (Round to the nearest 0.1%.)
3.If the company pursues the investment opportunity and otherwise performs the same as last year,what will be the overall ROI will this year? (Round to the nearest 0.1%.)
4.If Westerville's chief executive officer earns a bonus only if the ROI for this year exceeds the ROI for last year,would the CEO pursue the investment opportunity? Would the owners of the company want the CEO to pursue the investment opportunity?

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Definitions:

Hierarchically Structured

Organized in a way that ranks constituents or elements in levels of importance or authority, often found in organizations, systems, or biological classifications.

Authoritarian Parenting

A parenting style characterized by high demands and low responsiveness, where parents impose strict rules, expect obedience, and often use punishment to enforce discipline.

Descriptive Norms

Social norms that describe what behaviors are typically performed by members of a social group, indicating what is commonly done in a given situation.

Automatic Responding

Behaviors or reactions that occur without conscious thought, often as a result of learned associations or ingrained habits.